New 0.99% fixed rate mortgage, but is it really that cheap?

HSBC has launched a two-year fixed rate mortgage with an incredibly low interest rate.

Updated: 
New 0.99% fixed rate mortgage, but is it really that cheap?

It looks like the market for two-year fixed mortgage deals is hotting up now that HSBC has launched a 0.99% loan. The deal is available to borrowers with a minimum 35% deposit.

However, there is a £1,499 product fee to consider, so it's worth looking at all your options before diving in. Check out the best buy table below that shows the best deals with product fees under £500.

Two-year fixed-rate mortgages are the cheapest, but you only have certainty about your mortgage payments for a short period of time. If you want the added security of a five-year fixed rate, you'll pay a premium in the form of a higher interest rate.

Long-term fixed rates also come with much higher Early Repayment Charges, so you might need to take that into account too.

Top two-year fixed-rate mortgages

First, let's look at the two-year fixed-rate mortgages with the lowest rates around. Be warned, nabbing a tiny interest rate usually means you'll have a stump up a hefty product fee.

Lender

LTV

Interest rate

Product fees

Post Office

60%

1.21%

£1,995

HSBC

65%

0.99%

£1,499

HSBC

70%

1.34%

£1,499

Post Office

75%

1.33%

£1,995

HSBC

80%

1.48%

£1,499

Chelsea BS

85%

1.58%

£1,880

HSBC

90%

1.99%

£1,499



As you can see, there are some mammoth fees there. But what if you don't want to stump up a significant product fee? These are the best mortgages with fees under £500.

Lender

LTV

Interest rate

Product fees

Progressive BS

60%

1.74%

£0

Norwich & Peterborough BS

65%

1.49%

£195

HSBC

70%

1.84%

£0

Norwich & Peterborough BS

75%

1.74%

£195

HSBC

80%

1.95%

£0

Leeds BS

85%

2.10%

£199

HSBC

90%

2.49%

£0

Three-year fixed-rate mortgages

If you want certainty about your mortgage repayments for a little bit longer, a three-year fixed-rate mortgage may be a better option. First, let's take a look at the deals with the smallest interest rates.

Lender

LTV

Interest rate

Product fees

The Co-operative Bank

60%

1.74%

£1,499

Chelsea BS

65%

1.78%

£1,545

The Co-operative Bank

70%

1.94%

£1,499

Platform Mortgages

75%

1.94%

£1,589

Newcastle BS

80%

1.99%

£698

Platform Mortgages

85%

2.14%

£1,499

Post Office

90%

2.67%

£1,495

And now let's take a look at the best deals with a fee of under £500.

Lender

LTV

Interest rate

Product fees

Progressive BS

60%

1.99%

£0

Chelsea BS

65%

2.24%

£0

Tesco Bank

70%

2.25%

£195

Leeds BS

75%

2.19%

£199

Accord Mortgages

80%

2.24%

£475

Leeds BS

85%

2.39%

£199

Post Office

90%

2.97%

£0

Five-year fixed-rate mortgages

If you want to go for a longer-term fixed rate deal, then you may prefer a five-year fixed-rate deal. While you enjoy that security for longer, you may have to pay a premium in terms of a higher rate. You also have significant Early Repayment Charges to consider should you wish to leave the deal early.

Lender

LTV

Interest rate

Product fees

Post Office

60%

2.12%

£995

HSBC

65%

1.99%

£1,499

Danske Bank

70%

2.32%

£999

Post Office

75%

2.23%

£1,495

Post Office

80%

2.43%

£1,495

HSBC

85%

2.58%

£1,499

Norwich & Peterborough BS

90%

2.93%

£1,295

And now let's take a look at the best deals with a fee of under £500.

Lender

LTV

Interest rate

Product fees

Tesco Bank

60%

2.29%

£195

Virgin Money

65%

2.44%

£188

Danske Bank

70%

2.57%

£0

Tesco Bank

75%

2.54%

£195

Tesco Bank

80%

2.63%

£195

Tesco Bank

85%

2.74%

£195

Danske Bank

90%

3.28%

£0

Looking for a mortgage? Compare rates and charges at a glance

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