UK mortgage borrowers now have the choice of two loans with interest rates fixed at 0.94% for two years as the price war between lenders heats up.
HSBC and TSB are offering the ultra-low rate, which undercuts the previous best buy of 0.95%, and adds to a rising number of sub-1% deals for borrowers with large deposits.
HSBC said 0.94% was the lowest rate it had ever offered. Its mortgage comes with a £999 fee and is available to homebuyers and remortgagors. TSB’s deal, which was launched last week, is available to remortgagors only and has a £995 fee.
The rates are among the lowest ever offered and show how keen lenders are to attract borrowers.
HSBC’s deal is available on loans of up to £5m. However, Ashley Thomas, a director at the mortgage broker Magni Finance, said anyone borrowing less than £500,000 would pay less if they took HSBC’s no-fee deal with a 1.14% rate.
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