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NEW 3.99% mortgage rates with HSBC & Virgin Money

In good news for the UK housing market, HSBC has revealed they are launching a 5-year fixed rate mortgage with an interest rate of 3.99%.

This follows on from Virgin Money’s new 10-year fixed rate (also 3.99% interest) and 5-year fixed rate (3.96%) mortgages that were announced last week.

Mortgage interest rates soared following last year’s mini budget, with higher and higher rates toward the end of the year. That combined with the current cost of living crisis means these announcements are a step in the right direction for borrowers.

In this section (NEW 3.99% mortgage rates with HSBC & Virgin Money):

HSBC’s latest announcement has revealed a brand-new mortgage deal that is available at a rate below the Bank of England’s base interest rate (4% as of 9th February).

If you want to remortgage and are planning to borrow up to 60% (60% loan to value LTV) of your property’s value, then HSBC could be a good choice for you. You may need to act quickly to lock in this deal though, as it is never certain how long these new rates will be available for.

This 5-year fixed rate period is available exclusively for remortgages, so if you are looking for a new mortgage you won’t be able to benefit from these lower rates with HSBC.

What are the new Virgin Money mortgage rates?

Virgin Money announced their 10-year fixed rate mortgage (at 3.99% interest) the day before the Bank of England’s rate rise to 4%. This put Virgin Money amongst the lowest interest rates on the market, which is extremely beneficial for anyone looking to buy soon.

Unlike HSBC and Lloyd’s Bank, Virgin’s lower interest rate is available to new borrowers and is not exclusive to remortgages.

10-year fixed rates with interest rates this low are few and far between at the moment and if you are wanting to budget long term Virgin Money might be the lender for your mortgage.

Interest rates could drop again in the future though, so if you want the flexibility of switching your mortgage rate a few years down the line, a 2 or 5 year deal could work better for you.

Will more lenders offer lower rates in 2023?

Currently, the economy seems to be settling down slightly following the chaos of late last year. Interest rates soared after the Autumn mini budget, and the Bank of England have recently increased their base rate to 4%.

Although interest rates have been climbing (though house prices have been dropping), mortgage lenders have been gradually starting to reduce their fixed rate deals in 2023 to appeal to borrowers. As of February, there haven’t been any announced changes to variable or tracker mortgage deals.

Long term mortgage forecasts are mostly positive, with rates expected to level out around mid 2023. HSBC and Virgin Money’s announcements could encourage other lenders to make similar changes to their products, but which lenders will offer lower rates and when is hard to predict.

Should I choose HSBC or Virgin Money for my mortgage?

Either one of these lenders could be a good choice, as they presently offer the lowest fixed rates on the market. It is important to remember though that interest rates are not the only thing to consider when looking for a mortgage or remortgage. You also need to think about:

  • Length of mortgage term
  • The area you are buying in
  • The type of property
  • The mortgage type (residential, commercial, buy to let etc)
  • Your occupation and income (are you employed or self-employed?)
  • Do you have a history of bad credit or debt?

All these factors will affect which lender is the best choice for you. Although low rates are appealing due to the lower mortgage payments, you need to make sure you are also choosing the most suitable mortgage for your individual circumstances.

If you’re not sure which lender will work best for your mortgage, speak to one of our qualified mortgage EXPERTS. With years of expertise, we can compare rates across over 50 top UK lenders. We can help you decide if HSBC, Virgin Money or another lender entirely is offering the right mortgage for what you need.

Useful resources

Gov.uk – Support for Mortgage Interest (SMI)

Bank of England – Interest rates and Bank Rate

Statista – Average mortgage interest rates in the UK (March 2000-January 2023)

Office for National Statistics – Mortgage interest changes over the last 12 months

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