HSBC today launched its lowest mortgage rate ever - a 2-year mortgage fixed at 0.94%. We asked a selection of UK mortgage brokers on whether it's PR spin or a genuine product.
10 responses from the Newspage community
"As always, this type of deal is all about generating headlines and press releases rather than about being great for customers. This deal will be appropriate for an incredibly small section of people but will generate far more headlines than it warrants. The irony is that TSB have an identical rate, with a marginally lower arrangement fee and £300 cash back. But the HSBC media machine is a powerful beast."
"In the current market, every lender wants to grab the headlines and what better way to do it than a record low rate? "In reality, though, it means nothing if you don't tick all HSBC's policy boxes. Anyone with debt, or with a less than perfect credit score, is unlikely to be able to borrow below 1%. "Anything in this price bracket is likely to carry a hefty fee too, otherwise how is the lender making any profit? Beware buying into short-term savings and losing out on longer term better value."
"While HSBC will always have the extra column inches that this kind of move will generate on their radar, to borrow at 0.94% is incredible and shows just how competitive the market is. HSBC have always been at the forefront of the low interest rate market due to their sheer scale and deposit-backed lending. "Criteria from HSBC are pretty sensible so, providing applicants have the required equity in the property and are looking for a short term fix, it is a great opportunity."
"There's no catch with this product and it is available for purchases, remortgages, further advances and product transfers. The product fee is in line with the rest of the market with no hidden costs. "It is only available to those with at least 40% equity or deposit and as long as you have good account conduct, namely no missed payments or defaults, there shouldn't be a problem obtaining it. The offer is valid for six months so even if your current deal has a while left to run it is worth lining up your next deal now."
"The bun fight among lenders for low loan-to-value mortgages continues with this latest salvo from HSBC. Great news for borrowers with high deposits or levels of equity, especially for well-prepared remortgage borrowers who have the time to shop around. For those with the right circumstances, these record-low rates can offer huge savings to borrowers coming to the end of an existing rate."
"HSBC have grabbed the headlines with another sliver off their lowest rate. That said, clients still need advice as the service, criteria and fees of a lender need to brought into balance as there is a plethora of low rate offers in the market. It is a great product and another sign of an active market(ing department), but no-one should think one size fits all."
"The rate is incredible, with a max loan of £5 million. As a high net worth mortgage broker, this will be very attractive to our wealthier clients. "However, for those borrowing less than £500,000, when factoring in the £999 arrangement fee, this product is more expensive than HSBC's 1.14% product with no fee."
"While HSBC's reputation makes me sceptical about who will actually be classed as eligible, this shows the strength of the market at the moment for consumers as banks appear to be entering a rate war following the end of the Stamp Duty madness. "While the longer five-year deals are still the more popular choice, and rightly so given the current uncertainty and additional costs and hassle of remortgaging every few years, a sub-1% deal will still be hugely attractive to many and I would fully expect more high street lenders to follow suit in the coming weeks."
"HSBC are a lender that love being at the forefront of low rates to be visible on the best buy tables. This deal is about generating headlines and more lenders will also follow suit as the criteria for the products in this category will require any borrower looking at this deal to have either a 40% deposit or 40% equity in their property and ensure they have absolutely no blips in their credit file."
"With supply and demand in the market still failing to keep pace, it's a smart move from lenders like HSBC to offer low interest rates on mortgage products. This is a clear sign that lenders want people to buy houses. "There's never been a better time to borrow, and it's very likely that even with the absence of the stamp duty holiday, the property market will remain buoyant for the rest of the year."