HSBC UK has launched its lowest ever fixed-rate mortgage at 0.94%, alongside other changes to its range.
The bank said it is the lowest fixed-rate mortgage rate it has offered.
The two-year deal is available to borrowers with a 40% deposit and has a £999 fee. Alternatively, people can take out a “fee-saver” version with no product fee for a higher rate of 1.14%.
Several lenders have recently launched mortgage deals with rates sitting just below 1% as competition has been ramped up, although borrowers will need to weigh up the fees and other factors to work out if a deal is suitable for them.
Michelle Andrews, HSBC UK’s head of buying a home, said: “This change includes our lowest ever mortgage rate of 0.94%, plus other rates that are hitting new lows.”
The bank’s refreshed range now includes a 15% deposit deal fixed for two years at 1.99%, with a £999 fee, also with a fee-saver equivalent at 2.29%.
For people with a 10% deposit, HSBC UK is offering a rate of 2.49% fixed for two years, with a £999 fee.
People looking for a 5% deposit deal under the Government-backed mortgage guarantee scheme can also take out a two-year rate at 3.39% with a £999 fee with HSBC UK, or a fee-saver equivalent deal with a rate of 3.59%.
Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “It is encouraging to see a continuation to the fixed mortgage rate war for borrowers searching for a new deal.
“HSBC now offer a record low rate of 0.94% on a fixed-rate mortgage and have made several other rate reductions which may well turn heads.
“At 1.99% the two-year fixed offer at 85% LTV (loan-to-value) is the lowest rate today and shares the spot with Halifax.”
She added: “Whether the lowest fixed rate on the market is the most appropriate choice will depend on the loan size and someone’s individual circumstances, so it’s important borrowers weigh up the overall true cost of the deal before they commit.
“There are now several lenders offering fixed mortgages priced around 1% or less and with competition continuing it will be interesting to see how low lenders are prepared to go to grab the spotlight.”