"HSBC has really broken new ground with its sub-two per cent mortgage deal, the first time we have seen rates fall this low in the market. Although this particular deal is for borrowers with a 40 per cent deposit, other deals it has introduced are also competitive, however with a hefty booking fee of £1,199 borrowers need to shop around to find the best deal for their circumstances. With Bank of England Base Rate at an historic low, it is good to see rates dropping, but there is still a wide gap between average mortgage rates and Base Rate compared to 12 months ago and lenders need to do more to bring their rates down."
"It is interesting the two per cent barrier has been broken by a discount mortgage, rather than a tracker mortgage. Throughout the low rate environment the cheapest deals have been trackers. HSBC's new headline rate will be discounted from its Standard Variable Rate (SVR) by 1.95 per cent, and borrowers should be warned lenders are able to increase their SVR rates at any time, meaning the 1.99 per cent rate will increase with it. However whilst the Base Rate remains at 0.5 per cent, we can expect HSBC's SVR to remain fairly still, allowing a lucky few to enjoy a historic mortgage rate."
