Thursday, 8 December 2016

HSBC Scraps Is Market-Leading Mortgages As Rates Start To Rise


HSBC has scrapped its market-leading 0.99pc mortgage, and raised rates on several other deals.

The lender's mortgages have been best-buys for several months but have now been overtaken by other lenders.

HSBC launched the 0.99pc mortgage in June. At the time it was one of the lowest-ever loan rates. Its withdrawal is seen by many commentators as a significant indicator that rates will now rise.

It came with a fee of £1,499 and was available to borrowers with 35pc deposits.

The rate was beaten last month by Yorkshire Building Society's 0.98pc discounted rate which - for now - remains available. The mutual said it had "no plans at the moment" to change any of its deals.

The end of the 0.99pc deal means that HSBC's cheapest two-year fixed rate is now at 1.29pc, for buyers with 40pc deposits and with a £999 fee.

It has also withdrawn some 10-year fixes, meaning the cheapest remaining 10-year fixed rate deal is now half a percentage point more expensive than before.

The withdrawn rate was 2.49pc, for borrowers with 35pc deposits. The lowest rate is now 2.99pc with no fee, for borrowers with 40pc deposits.

The lender is the first to make significant changes to multiple deals, but experts say rates have reached their lowest point and are now likely to rise across the board.

This is because swap rates, which determine the cost of borrowing by lenders, have been rising and have almost doubled since June.



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