HSBC introduces 1.99% mortgage
The introduction of a record low 1.99% mortgage by HSBC has grabbed the headlines but again there is controversy regarding the specific conditions of this offer. Many mortgage brokers are warning customers that the 1.99% rate may not be available to the vast majority of those in the UK. So what exactly is going on?
In simple terms, HSBC will be discounting its standard 3.94% variable mortgage rate for two years to 1.99%. However, to gain access to this particular rate home owners will need to lay down a 40% deposit on their house purchase and will be charged a fee of £1199 to put the arrangement in place. For those unable to put down such a deposit there are other discounted offers available which include 2.49% for a 25% deposit and 3.89% for a 10% deposit.
Many observers are accusing UK mortgage providers of a "smoke and mirrors" strategy which grabs the headlines and attracts new customers only to find out that the vast majority will not qualify for the sensational headline rates. There is also the issue of mortgage liquidity in the UK marketplace which is something that has hung over the sector like a grey cloud for many months now.
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