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Lender battle over five-year fixes

Five-year fixed rates are the latest mortgage battleground with HSBC and Leeds Building Society both launching market-leading rates.

This shows that lenders are still competing for new business by cutting rates despite the imminent prospect of an interest rate hike.

HSBC's new fix has been awarded the highest possible "outstanding" rating by financial website Moneyfacts.co.uk.


The deal is priced at 3.49% to 90% LTV until 30 November 2020 and is open to applicants who borrow up to £400,000.

HSBC also charges a £999 fee, all of which is payable upfront. It also offers an incentive package for remortgage customers of free legal fees.

Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “HSBC has improved its range for smaller deposit holders yet again, storming into the top five of its sector as a result."

Nelson said the 90% LTV market has managed to escape unscathed from the recent rate increases, which have mostly affected lower-LTV tiers.

"The average two-year fixed rate mortgage at 90% LTV has fallen from 4.38% a year ago to 3.43% today, while the average five-year fixed rate fell from 4.98% to 3.97% over the same period.”

She said that borrowers with more modest deposits should review their options as they could make large interest savings.

Leeds Building Society has launched a new five-year fix for remortgagors charging 3.34% to 85% LTV with no product fee.

Martin Richardson, general manager, business development, at the Leeds said: “We’ve experienced strong and growing demand in the past couple of months from remortgagors who are taking the opportunity to switch to a better deal.”

The deal is fee-free and includes a free valuation for properties worth up to £500,000, and fees assisted legal services.


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