HSBC introduces new long term fixed rate mortgages

As of tomorrow Tuesday 24 February, HSBC is following up its market leading 2.99 per cent two year fixed rate mortgage, with the introduction of two new longer term fixed mortgages: a five year deal at 3.99 per cent and a ten year loan at 4.98 per cent. The popularity of HSBC's two year fix can be seen in a doubling of the bank's mortgage application requests in February compared with January 2009.

HSBC's early repayment charge declines by one percent for each year of the loan, to zero at the end of the fixed period. This policy is fairer to the majority of borrowers as ERCs are more likely to be paid toward the end of the loan than at the beginning, as borrowers situations change over time.

In addition, for those borrowers keen to pay their mortgage down quicker, all HSBC fixed rate customers can overpay the equivalent of 20% of their monthly payment each month without incurring any ERCs.

Martijn van der Heijden, head of mortgages at HSBC commented, "The clear feedback we have received from customers is that they now want to lock into today's historically low interest rates. Base rates don't have much further to fall, so demand for longer term fixed rate mortgages is increasing. Anyone looking to take out our ultra low 2.99% two year fixed rate needs to move quickly as it is only guaranteed to the end of the month."