Lenders offering more tracker rates as HSBC brings back sub-1% deal
HSBC for Intermediaries is one of a selection of lenders providing cheap tracker rate mortgages without early repayment charges.
The vast majority of mortgage borrowers lock into two- or five-year fixed rates but they are not always the most suitable options, especially if borrowers want to sell their property, refinance to release equity, or make larger lump sum overpayments.
What is HSBC's new rate?
HSBC for Intermediaries is offering one of the most competitively priced tracker rates, and it is available for property purchases and remortgages. The 0.99% deal tracks the Bank of England base rate plus a margin of 0.74%. It has a £999 arrangement fee, and applicants will need a 40% deposit to qualify.
After the initial tracker period the mortgage reverts to HSBC's 3.54% standard variable rate unless you remortgage after two years, and the APRC is 3.2%. The maximum loan £5 million.
Aaron Strutt, product director at Trinity Financial, says: "HSBC's rate is incredibly cheap, but it might not stay below 1% for long, especially when the inflation rising, and the Bank of England signalling it will raise rates potentially a few times this year.
"The early repayment charge-free trackers are useful for borrowers looking for a shorter-term option who do not want to be tied in. Nationwide and Barclays are offering competitively priced variable rates with the option to switch to a fix and combat future rate rises."
Representative example: A capital and interest mortgage of £250,000 payable over 25 years, initially on a tracker rate basis for 24 months at 0.99% and then on a standard variable rate of 3.54% for the remaining 23 years, would require 24 monthly repayments of £941.05 followed by 276 payments of £1,230.93. The total amount repayable would be £363,337 made up of the loan amount, plus interest (£112,320.71) and £999 (product fee), £0 (final repayment charge), £30 (completion fee). The overall cost for comparison is 3.2% APRC representative.
The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.
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