HSBC launches UK's first sub-1% fixed-rate mortgage

HSBC bank front on the high street

Property buyers can now lock in a sub-1% mortgage for two years, as HSBC has launched the UK’s lowest ever fixed-rate mortgage at 0.99%.

The deal is available to both buyers and those looking to remortgage, though you can only get it if you borrow up to £500,000 and have an up to 35% deposit (65% maximum loan-to-value). 

After the two-year fix ends, the standard variable rate (SVR) kicks in at 3.94%, although this figure can change at any time.

Rachel Springall, financial expert at says “This new 0.99% two-year fixed deal from HSBC enters the market as the lowest fixed rate available, and the first sub-1% fixed deal since our records began.”

However, the HSBC deal has a £1,499 product fee, which means it could be beaten by a mortgage with a higher rate that has lower fees.


Mrs Springall warns: “As with any deal, applicants should always work out the true cost of the mortgage to decide whether it’s right for them.”

For example, someone borrowing £150,000 on a £250,000 property over 20 years would pay £689 a month with HSBC’s new deal. After factoring in the fees, the total cost over two years is £18,035. If buyers don’t remortgage after the fixed rate period ends, monthly repayments will rise to £882, assuming the SVR doesn’t change.

However, Norwich & Peterborough Building Society’s two-year fix at 1.49% could work out marginally cheaper over the first two years, as its fees are just £635. With £723 monthly repayments, the two year cost is £17,987 - £48 cheaper than the new HSBC deal.

But if buyers don’t remortgage with Norwich & Peterborough after the fixed rate period they could get stung. Its SVR is currently 4.99%, and if that doesn’t change, repayments would skyrocket to £961 a month.

Your Comments

This is a good deal, but not the "best ever deal since records began". I have had an HSBC tracker mortgage for the last 8 years. It tracks at 0.49%. above base for the full term of the mortgage. So I am paying just 0.99%. Now that's got to be the best ever deal since records began.

Who said best ever deal since records began? We're talking about the best deals for fixed rates ;)

Sounds like you've beaten this HSBC offer, but a handful of borrowers have done better still. At least one lender sold trackers at a discount to the base rate in 2007, meaning some people were in theory owed interest when the base rate fell to 0.5%.

Sadly for these borrowers, in practice, most of these lenders set caps which stopped these rates falling below 0%.

I have a Woolwich (Barclays) tracker that has 5 years to run.
House worth £290K (ish), owe around 50K, paying £970/month. Surely it would make sence for me to move to another lender to get a cheap rate and be paying less/month? Even if I have to pay a fee.

Hi Tryingtobemortgagefree,

Thanks for your comments. 

It's impossible to tell the best mortgage deal for your circumstances, without going into quite a lot more detail. The fees you pay, length of the mortgage and interest rate can all affect how much interest you'll pay overall. 

It might be best to speak to a mortgage broker and see if they think you can get a better deal. We partner with London & Countrywhich doesn't charge a fee for mortgage advice. Plenty other brokers are out there though.