With mortgage rates having sat at historic lows for some time now, and lenders continuing to battle amongst themselves for the biggest market share, a new wave of competition has been launched as HSBC releases a five-year fixed rate at under 2%.

With experts saying that the bold move by HSBC is ‘astonishing’, some believe that the rate of 1.99% will intensify the competition within the market.

It is anticipated that an avalanche of rate cuts amongst the lenders will begin now that this benchmark move has been announced.

Andrew Montlake, who is a mortgage broker for Coreco, commented:

“T

he breaking of the 2 per cent barrier for a five-year fix is a watershed moment and one many thought would never be seen in the UK.”

He added that whilst others would be keen to compete to retain existing and gain new customers, it would reach a point where their profit margins become too tight.

The HSBC reduction in its five-year fixed from 2.19% to 1.99% would save a borrower with a £200,000 mortgage over 25 years over £1,100 over the duration of the fixed rate. It is available to anyone with a maximum loan to value (LTV) of 60%, and carries a booking fee of £1,499.

In order to operate in the capacity of a mortgage advisor, you will need to complete your CeMAP training and pass the end exam. You can then advise your customers on the most cost-effective and suitable mortgage solution for their needs.

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