HSBC undercutting competitors with 1.89% five-year fix

by Aaron Strutt

Mar 25 2018

HSBC for Intermediaries is undercutting many of its competitors by offering one of the lowest five-year fixed rates.

The 1.89% rate is fixed until 31 May 2023 and at the end of this period, it reverts to the lender's variable rate currently of 3.94%. The overall cost for comparison is 3.22% APRC representative.

There is a £999 arrangement fee and applicants will need a 40% deposit to qualify. Early repayment charges apply for the fixed rate period and the mortgage is available for £1 million+ loans.

HSBC will pay for the property valuation and legal fees if you remortgage to the bank. It also provides interest-only mortgages to those with a valid repayment vehicle and a minimum annual income of at least £100,000.

Aaron Strutt, product director at Trinity Financial, says: "If you are one of HSBC's Premier Customers the five-year fixed rate is lowered by 0.05% although the arrangement fee increases to £1,499.

"There is still a wide range of lenders offering sub-2% five-year fixed rates even though the Bank of England base rate increased recently. The low rates have tempted many borrowers to lock into fixed rates as they look for longer-term payment security."

Representative example: A mortgage of £250,000 payable over 25 years, initially on a 1.89% fixed rate until 31/05/2023 and then on a variable rate of 3.94% for the remaining 23 years, would require 60 monthly repayments of £1,046.30 followed by 240 monthly repayments of £1,259.73. The total amount repayable would be £366,337.20 made up of the loan amount, plus interest (£115,113.20) and fees of £999. The overall cost for comparison is 3.22% APRC representative.

The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.