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Product launch of the week: HSBC’s sub-1% deal

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HSBC launches sub-1% mortgage - a good deal or not?

What’s new?

HSBC has launched a headline-grabbing sub-1% mortgage. Borrowers with a 40% deposit or equity can access a discounted variable rate of 0.99%.

They say…

Peter Dockar, head of mortgages at HSBC, said: “We know how important a low monthly payment is for borrowers and are committed to offering market leading rates. We’re the only bank to offer a completely paperless mortgage application and are now leading the way by offering a mortgage of less than 1%.”

Good news?

Kevin Mountford, head of banking at MoneySuperMarket, said it’s the first time HSBC has ever offered a mortgage below 1% and this is a ‘great offer’. He also points to the generous penalty-free overpayment allowance of up to 20% of standard mortgage repayments each month.

Any caveats?

The new mortgage has a high arrangement fee of £1,999, which may make it a less attractive option for smaller borrowers. Also, the rate is linked to the HSBC standard variable rate, rather than the Bank of England base rate, meaning it can change regardless of base rate changes.

Mortgages: 0800 169 6333

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