HSBC has captured the headlines by launching Britain's lowest fixed-rate mortgage, allowing homeowners to borrow at 2.99% for five years. It's an excellent headline rate that easily beats the next best rate in the market, which is 3.69%.
However, don't get too excited. It's only available to buyers with 40% deposits or at least that much equity (the estimated sales value less any mortgage) in their house. That will put it out of reach of most first-time buyers, meaning it will do little to stimulate the lifeless housing market.
At £1,499, the arrangement fee is also a lot steeper than most rivals are offering. And even if you can afford the fee
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
and have the necessary deposit, you may still not get the mortgage. Several mortgage brokers have reported that "perfectly credit-worthy clients" have been rejected by HSBC.
If you can't meet HSBC's tough criteria, Nottingham Building Society may be the place to go. It offers a five-year fixed rate mortgage at 3.69%, with a £1,499 fee. The rate is not as competitive as HSBC's, but you only need a deposit of 25% to qualify.
-
Will Labour scrap the British ISA?While it was the brainchild of the Conservatives, the British ISA received little love and now it seems Rachel Reeves may scrap the idea altogether. What does this mean for the ISA landscape?
-
Direct Line returns to profit but loses almost 500,000 customers - here is what it meansDirect Line posted a pre-tax profit of £61.6m for the six months to June 30, compared to losses of more than £75m a year ago - what does it mean for the insurance sector?
