Two new fixed rate deals launched by HSBC
Over the past few weeks a number of lenders have been launching new fixed rate mortgage deals with competitive rates of interest, and this follows the base interest rate plunging to a fresh record low of just 1 percent, which was announced after the February Monetary Policy Committee meeting.
Over the past five months the base rate has plunged from 5 percent in October to just 1 percent in February, which is the lowest level in the three hundred and fifteen year history of the Bank of England.
One of the major lenders that has launched some competitive fixed rate deals in response to the base rate cuts is HSBC. The bank has recently launched two new fixed rate deals with very competitive rates of interest, according to recent reports. The mortgages can be fixed for either five or ten years depending on the borrower’s needs and preferences. The five year fixed rate mortgage deal has been made available at an interest rate of 3.99 percent, and the ten year fixed rate deal is available at 4.98 percent.
However, there is a catch. Like many other competitive mortgage deals that have come onto the market from a range of different lenders the two fixed rate mortgage deals are only available to those that have a hefty deposit that they can put down, which means that lower income households, first time buyers, and those with little equity in their existing homes will not benefit.
Borrowers that want to opt for one of these mortgage deals must put down a deposit of at least 40% percent of the property value.
An official from HSBC said that the demand for fixed rate mortgage deals was on the up, as consumers were not aware that the base rate would soon be at rock bottom. He said: “Base rates don’t have much further to fall, so demand for longer term fixed rate mortgages is increasing.”
Related Posts
Continued popularity for variable rate mortgages
Whilst there was a time when people wanted to avoid variable rate mortgages because of the high rate of interest attached to them many people at the moment are finding that these are the most cost effective mortgage types to opt for because of the record low interest rate that is still in place. »
Those with fixed rate mortgage may be losing out
A recent report has highlighted how many British homeowners that have fixed rate mortgage deals in place may be missing out financially because of the cut in interest rates over recent months.»
A five year fix could work out cheaper than a two year one
Fixed rate mortgages for short periods have become popular in the UK over recent years. The Chancellor of the Exchequer, Alistair Darling, is pushing for consumers to consider very long term fixed rate deals, such as those for 20 and 25 years in order to increase security and peace of mind. However, lenders have stated that most consumers in the UK do not want to tie themselves into a fixed rate for such a long period, and prefer the more traditional two and three year fixed rate terms.»
Lenders pushing more expensive deals
A recent report has suggested that lenders may be pushing their more expensive mortgage deals onto consumers, with deals such as short term fixes, which are being pushed by lenders, proving to be costly for consumers. Many lenders are said to be focussing on pushing deals where rates are fixed for two years or less, and which tend to be the most expensive for consumers.»
Five year fixed rate mortgage now more popular
Over recent years fixed rate mortgages have been very popular amongst consumers who wanted to keep their mortgage repayments static for a period of time, with the deal enabling them to enjoy a specified period on a fixed rate on their borrowing, which means that their repayments will also be fixed for that period of time. Until recently most consumers have, however, opted for shorter term fixed rate deals of two or three years rather than committing to the longer term deals of five or ten years.»
Leave a comment
More from Mortgage News category
Ads and sponsors