Competition to offer sub-1% mortgage rates has intensified, as major UK lenders shake up their ranges.
HSBC UK has unveiled a mortgage rate below 1% for the first time in nearly five years for the bank.
It has also cut the rates on various deals across its range, including those offered for people with 5% deposits under the UK Government-backed mortgage guarantee scheme.
Among the new offers are a two-year fixed-rate deal at 0.99%. Borrowers will need a 40% deposit and the mortgage has a £999 fee.
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Michelle Andrews, HSBC UK’s head of buying a home, said: “For the first time in almost five years we have a sub-1% mortgage, and we are also reintroducing our three-year fixed-rate option, with many rates lower than when we last offered them in July 2020.”
Nationwide Building Society is offering a 0.99% mortgage fixed for two years for borrowers with a 40% deposit and with a £1,499 fee.
Cashbacks
Its first-time buyer mortgages also come with £500 cashback, while those looking to re-mortgage to the society can choose between £500 cashback or free standard legal fees.
Nationwide mortgages director Henry Jordan said: “Whether someone is buying a new home or re-mortgaging their existing property, we have a range of competitive mortgages on offer, including sub-1% rates.”
Green deals on offer too
Meanwhile, the number of lenders offering so-called “green” mortgages – offering lower rates of interest to customers buying energy-efficient, new-build homes, or improving existing properties to deliver the same result – is also growing.
Virgin Money launched its Greener Mortgages after a survey found tackling climate change is important to 78% of people, and the pandemic has made over one-third (34%) think more about their environmental impact.
Nationwide and NatWest Group – the parent of Royal Bank of Scotland – have both launched similar products.
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Nationwide also has a Green Additional Borrowing mortgage for those who already have a mortgage with the society.
The fee-free mortgage has the lender’s “best” rate, at 0.75%, and people can borrow up to £25,000, depending on individual circumstances.
The deal is available at up to a maximum of 85% loan-to-value (LTV) and the 0.75% rate is the same for all eligible borrowers, regardless of the LTV.
To qualify, at least half (50%) of the additional borrowing must be spent on energy-efficient home improvements.
For existing or new members buying homes with high energy efficiency ratings, the society offers cashback of up to £500 under its Green Reward scheme.