Five-year fixed mortgage rates available below four per cent for first time since September

Vicky Shaw
·2 min read
It is the first time since September 2022 that a five-year fixed-rate mortgage has been offered by HSBC at a rate below four per cent (PA Wire)
It is the first time since September 2022 that a five-year fixed-rate mortgage has been offered by HSBC at a rate below four per cent (PA Wire)

Five-year fixed-rate mortgages are available at below four per cent once again amid signs the market is settling following the turmoil sparked by the disastrous mini-Budget last autumn.

HSBC UK has reduced a five-year fixed-rate mortgage deal for borrowers with a 40 per cent deposit to 3.99 per cent. The deal has a £999 fee.

It is the first time since September 2022 that a five-year fixed-rate mortgage has been offered by HSBC at a rate below four per cent.

It is only available to homeowners who are remortgaging or those who are switching rates (existing customers rolling off an old deal and onto a new one with HSBC).

The move is part of a wider range of mortgage rate cuts made by HSBC UK on Tuesday.

It's encouraging to see fixed mortgage rates coming down for borrowers looking to secure a new deal

Rachel Springall, Moneyfacts.co.uk

Many mortgage deals vanished from the market following the mini-budget last September and when mortgages returned they were priced at significantly higher rates.

In recent weeks there have been signs of the fixed-rate mortgage market settling down.

According to figures from financial information website Moneyfacts.co.uk, the average five-year fixed-rate mortgage on the market at the start of January was 5.63 per cent.

By the start of February it had fallen to 5.20 per cent.

Borrowers on variable rate mortgages meanwhile have been feeling the impacts of recent rises in the Bank of England base rate.

Figures released by Halifax on Tuesday show the average house price is now more than £12,000 below a peak seen last August.

Several commentators have said they expect to see house prices potentially dipping this year as rising living costs squeeze home buyers’ budgets.

Moneyfacts.co.uk said on Tuesday morning that HSBC UK is the only lender on its records offering a sub four per cent, five-year fixed mortgage.

However, the website said it has seen below four per cent rates offered on 10-year fixed mortgage deals by Virgin Money and Lloyds Bank.

Rachel Springall, a spokeswoman for Moneyfacts.co.uk said: “It’s encouraging to see fixed mortgage rates coming down for borrowers looking to secure a new deal.”

She added: “Due to the unpredictable nature of the mortgage arena, it is imperative that both those looking to purchase a property or who wish to refinance seek independent advice from a broker to navigate the options available to them.”

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