HSBC has launched a new series of mortgages with the lowest interest rate it has ever offered, but experts have mixed views on whether it will help the property market.
Customers at HSBC will have access to a mortgage deal which offers 2.99 percent - its lowest ever - on a Premier 2-year discount, the bank has announced.
The firms head of mortgages Martijn van der Heijden said that the Bank of England's base rate cut had allowed HSBC to lower its own rates, "which were already the cheapest to be found on the high street". He said that he hoped the move would show potential homeowners that mortgages are available "and at sensible rates".
Some experts welcomed the move, suggesting that it could lead to improved conditions in the property market. Many lenders have tightened their criteria on mortgage lending as they seek to balance their books following the credit crunch.
Jonathan Cornell, from estate agency Hamptons International, told the Daily Express that the 2.99 percent rate was "excellent news for the mortgage market". He added: "The rate should put a stop to the chronic lack of competition that has been holding the mortgage market back in the past few months."
However, some sounded a note of caution. Melanie Bien, from Savills Private Finance, told the Times that, while the offer was "attractive", there were two difficulties. Firstly, borrowers need to change their current account to a premier account, which could prove a "hassle".
Secondly, "because it is a discounted variable rate, it is connected to the lender's standard variable rate, which is set at the lender's discretion", she warned.
