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HSBC offers lowest mortgage rate

The latest mortgages from HSBC include a two-year deal at 1.99% - the lowest rate the bank has ever offered. But is there a catch?

HSBC (www.hsbc.co.uk) is offering a two-year discount mortgage at 1.99%. This is the lowest mortgage rate the bank has ever offered.

The interest rate is discounted by 1.95% from HSBC’s standard variable rate (SVR), which is currently 3.94%.

However, the deal is only available to borrowers with a 40% deposit and comes with a booking fee of £1,199.

Chris Eagle, commercial manager at CreditChoices.co.uk, commented: “This is an attractive rate for those with a big deposit, although borrowers will need to weigh it up against the hefty fee.

He added that buyers need to bear in mind that the rate is discounted from HSBC’s SVR and warned: “If are considering this deal, you need to be aware that lenders can increase their SVR at any time, so there is no guarantee that your rate will remain this low.”

HSBC’s mortgage range also includes the following deals for buyers with just a 10% deposit:

• A two-year fixed-rate mortgage at 5.99% with a £599 fee
• A five-year fixed-rate mortgage at 6.49% with a £599 fee
• A two-year discounted mortgage at 3.89% with a £1,199 fee
• A lifetime tracker mortgage at 4.59% with a £999 fee.