HSBC announce 1% interest mortgages

HSBC announce 1% interest mortgages

HSBC's are offering their "cheapest ever" mortgage. They've surpassed Yorkshire Building Society's 1.14% fixed rate deal, to offer would-be home-owners a mortgage with interest rates fixed at 1% for two years.

Seeing as there's something of a crisis when it comes to people actually buying houses, mortgage lenders are being risky with what they're offering, or innovative, depending on your outlook.

Housing analyst, Henry Pryor, says of this HSBC product: "For me it's yet another indication that the market has topped out so as a professional buyer I'm makings sure that deals I'm negotiating today can't be beaten if the market does fall."

So what are the ins-and-outs?

Well, HSBC are offering up to £500,000 on a fixed interest rate of 1% for two years. This mortgage will probably need you to have a 35% deposit or equity in your existing home.

One of the things you could do with a mortgage like this, is intentionally overpay in the two years where there is low interest.

That way, you can reduce the term of your loan, and increase the equity you have in it.

You won't be able to go wild though - HSBC will only let you overpay up to a maximum of 10% of the mortgage balance each year.

So, this isn't a mortgage that is going to appeal to new buyers, as it requires such a large lump sum in advance. However, if you want to switch mortgages and want to switch to lower rates, this could be just the ticket.

Of course, Barclays have brought back their 100% mortgage too, so there's a lot to consider.

What do you think?

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