The bank had been offering a five-year fixed-rate mortgage for just 2.99% to borrowers with a deposit of 40%. However, all of its allocated funding for the deal had been consumed, it said, owing to “fantastic demand”.
Borrowers will still be able to apply for a five-year fix at 60% loan-to-value through HSBC, but the rate will be slightly higher, at 3.29%. As a concession, however, the bank is ready to drop its booking fee for the product from £999 to just £499, which is almost £1,000 less than the fee for the withdrawn product.
This lower fee also keeps the product competitive against NatWest’s competing five-year fixed-rate deal at 2.95%, which carries a hefty fee of £2,495.
There remains a selection of five year deals available under 3% from lenders including Santander and RBS, though only Santander is able to match the fee for the withdrawn HSBC mortgage product, at £1,495.
Banks are currently being incentivised to lend at lower rates by the Bank of England’s ‘Funding for Lending Scheme’. Banks that lend out more to the real economy will be entitled to borrow more and will pay less for it.
However, there is still a notable air of caution, as the lowest rates are only available for large deposits of 30%, or more commonly, 40%.
Check out Which4U's mortgage listings today for an idea of the best deals currently available.
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