HSBC has reduced rates across its residential mortgage range, resulting in its lowest ever fixed rate product priced at 0.89 per cent. This follows in the wake of Nationwide’s introduction of the first sub -1% mortgage product that launched at the end of July.
HSBC’s new 0.89% rate is similar in structure to Nationwide as offered at 60 per cent loan to value (LTV) over a fixed two-year period with a fee of £999. In comparison, Nationwide’s equivalent product is 0.99% with a £1,499 fee but comes with a 5-year fix, whilst TSB also introduced a sub 60% LTV remortgage at 0.94% for a two-year fixed rate.
This is the latest example of lenders continuing to fight it out to win the attention of the highly motivated cash-rich buyers that are actively looking to move home. The latest figures from Rightmove identify that there are currently 80% more active buyers than there were between 2017-19, and is even 23% higher than this time last year.
Discussing their new prices, Nationwide director of mortgages Henry Jordan said “The significant reductions we’re making across a wide range of our mortgages demonstrates our ongoing support for all types of borrowers and, by expanding our range with the launch of new three-year products, we are also giving them even more choice when they come to make that decision on how long to fix that mortgage rate.”
But it is not just the top end of the market that is benefitting from enticing new mortgage products, there are slashes to rates across the board and first-time buyers looking for a 90% LTV mortgage will see a 0.35% reduction paying 2.44% with a £999 fee on a two-year fix.
There is a clear level of support being given to first-time buyers right now, and lending for that group is up by 25% on 2020, a clear indication that lenders are feeling confident about the UK’s economic outlook.