Mortgage price war intensifies

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A mortgage price war has intensified as a bank has brought back a pledge to match the rates on offer from its high street rivals.

HSBC said that for new and 
existing customers with deposits or equity between 10 per cent 
and 30 per cent, it will match the on-sale mortgage rates being offered by several other major providers with a booking fee of up 
to £1,499.

The bank said that interest on its range of 70 per cent, 80 per cent and 90 per cent loan-to-value mortgages will be the “lowest on the high street” for two-year and five-year fixed rates, lifetime trackers and two-year discount rates.

HSBC said its “high street specials” range will match on-sale rates with booking fees of up to £1,499, available between 70 per cent and 90 per cent loan-to-value offered by Barclays (Woolwich Mortgage), Lloyds, Nationwide, NatWest, Royal Bank of Scotland, Santander and TSB.

The offer, which is set to run until the end of February, will exclude any of their subsidiaries or other trading names and it will apply on “like-for-like” comparisons.

HSBC ran a similar pledge from late autumn 2013 until early 2014.

In recent months, a string of mortgage providers have been slashing their rates to some of the lowest levels they have ever offered as expectations over exactly when the Bank of England base rate will start to increase from its historic 0.5 per cent low have been pushed back.

The Bank looks unlikely to raise interest rates until the final months of 2015 and economists believe it will probably only increase rates by 25 basis points overall in 2015 (from 0.50 per cent to 0.75 per cent).

Meanwhile, the recent overhaul of stamp duty in the Autumn Statement has fuelled expectations that housing market activity is set to pick up again early in the new year.