HSBC cuts rates on fixed-rate deals

In what is turning out to be a remarkably positive day for homebuyers, HSBC has become the latest lender to announce it is to cut rates and fees on its fixed-rate mortgage deals.

Following the lead of the Woolwich earlier this week, the lender has confirmed rates will fall on mortgage products from tomorrow.

As part of the new arrangements, the cost of a standard two-year fixed-rate mortgage will fall 0.31 per cent, together with the booking fee reduction of £200 - down from £799 to £599.

Longer fixed-rate loans will fall by 0.16 per cent, with associated booking fees falling to £599.

The changes are in response to falling Swap rates – the rate at which banks lend to each other – which research from MoneyFacts finds are now falling sharply.

HSBC also confirmed a special 5.98 per cent five-year fixed-rate mortgage will be introduced, available to all customers with an HSBC Plus or Premier account with a booking fee of £999.

"With an estimated 750,000 people looking to remortgage in the second half of 2008, we are doing all we can to keep the cost of borrowing down," Andy Mielczarek, head of lending at HSBC commented.

Lowering our rates by 0.31 per cent means a saving of almost £500 a year for a homeowner with a £160,000 loan, according to HSBC.

Finally, HSBC will continue to offer its market leading discount and tracker mortgages with rates as low as 4.99 per cent for two years.

Chris O'Toole