HSBC has reduced selected residential mortgage rates
Britain’s largest lenders are intensifying the mortgage price war for Britons stepping onto the property ladder.
HSBC is offering a £1,500 cashback incentive for first-time buyers alongside a reduction to its fixed-rate products. The banking giant has lowered selected residential mortgage rates by as much as 0.29 percentage points, with its five-year fixed-rate deal for purchasers with a 5% deposit now standing at 5.37%. The package is especially attractive because it includes £1,500 cashback, a complimentary valuation and no product fee.
These benefits could assist cash-strapped buyers confronting the substantial upfront costs of acquiring their first home. The deal was spotlighted by Moneyfacts as one of its financial ‘Picks of the Week’, receiving an ‘Outstanding’ product rating.
Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk, said: “The deal also offers a lucrative incentive package which includes a free valuation, £1,500 cashback and no payable fees, which may make this an ideal option for first-time buyers looking to keep costs to a minimum.”
The development comes as lenders continue to compete for market share amid expectations that borrowing costs could decline further over the coming months.
However, mortgage borrowers are still confronting rates considerably higher than those available before the inflation and interest-rate shock that followed the pandemic.
Landlords also offered lower rates
HSBC has also cut rates on selected buy-to-let mortgages by as much as 0.09 percentage points. Its five-year fixed-rate mortgage at 65% loan-to-value is now on offer at 4.57% for second-time landlord borrowers.
The deal comes with a sizeable £3,999 product fee but includes a free valuation and permits overpayments of up to 20%. Moneyfacts noted that the rate reduction helped strengthen its position as a Best Buy product.
Savers can earn more than £900 tax-free
The latest competition is not limited to mortgages. Savers looking to shield cash from the taxman can now secure a market-leading 4.67% on a one-year fixed-rate cash ISA from Secure Trust Bank.
Someone depositing the full £20,000 annual ISA allowance could earn in excess of £900 in tax-free interest over the term, according to Moneyfacts. The account can be opened with a minimum of £1,000 and permits additional deposits for 30 days after opening.
However, customers requiring early access to their funds face a penalty equivalent to 90 days’ interest and must close the account. Ms Eastell said: “The boost to the one-year option sees the account pay a market-leading 4.67%.”
Personal loan rates remain competitive
Borrowers have also been presented with a fresh option despite higher rates in certain areas of the loan market. M&S Bank has raised the rate on its personal loan range for borrowing between £7,500 and £25,000, taking the representative APR from 5.7% to 5.9%. Despite the rise, Moneyfacts said the loan remains amongst the most competitive offers currently on the market. One appealing feature is that borrowers can make overpayments without incurring an early repayment charge, potentially lowering the total interest cost.
Experts continue to advise consumers to compare options carefully before committing to any financial product, as rates and incentives can differ significantly between lenders.
The latest wave of offers highlights how banks are increasingly relying on cashback incentives, fee-free arrangements and eye-catching rates to draw in customers in a fiercely competitive marketplace.
