Friday, 13 July 2012 2:52 PM
HSBC has launched what it claims is the lowest-ever fixed rate mortgage as the Treasury and Bank of England pilot a new scheme.
The bank’s deal is only available to borrowers with a 40 per cent deposit or equity and comes with a booking fee of £1,499 but the rate is just 2.99 per cent. HSBC is also offering its lowest-ever seven-year fixed rate mortgage at 3.99 per cent.
The Funding for Lending Scheme launched by the Treasury and Bank of England is designed to boost lending in the real economy by enabling banks and building societies that lend more to UK households and businesses to borrow more and do so at a lower cost than those that cut their lending.
They will be able to borrow up to five per cent of their stock of existing lending to the real economy, which works out at about £80bn across all potentially eligible lenders.
Chancellor George Osborne said: "Today's announcements aim to make mortgages and loans cheaper and more easily available, providing welcome support to businesses that want to expand and families aspiring to own their own home.
"The Treasury and the Bank of England are taking coordinated action to inject new confidence into our financial system and support the flow of credit to where it is needed in the real economy – showing that we are not powerless to act in the face of the eurozone debt storm."
Peter Dockar, head of mortgages at HSBC, said "Every borrower has different needs from their mortgage. We recognise that many are looking for certainty with their mortgage payments over the longer term and have launched these products to meet that demand.
"This is the lowest ever five year fixed rate to come to the market and with the security of our retail deposit funding we are committed to offering competitive rates to benefit our customers with what is for many, their largest monthly commitment."