HSBC is offering first-time buyers a £1,500 cashback bonus as the banking giant slashes selected residential mortgage rates by up to 0.29 percentage points, intensifying a price war among Britain's largest lenders. The five-year fixed-rate deal for purchasers with a 5% deposit now stands at 5.37%, and the package includes a free valuation and no product fee – a trifecta that landed it an 'Outstanding' rating from Moneyfacts, which named it one of its financial 'Picks of the Week'.
Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk, said: 'The deal also offers a lucrative incentive package which includes a free valuation, £1,500 cashback and no payable fees, which may make this an ideal option for first-time buyers looking to keep costs to a minimum.' The move comes as lenders compete for market share amid expectations that borrowing costs could fall further, though mortgage borrowers still face rates considerably higher than before the post-pandemic inflation and interest-rate surge.
“HSBC cuts mortgage rates and offers £1,500 cashback to first-time buyers, as lenders compete amid falling borrowing costs.”
HSBC has also cut rates on selected buy-to-let mortgages by up to 0.09 percentage points. Its five-year fixed-rate mortgage at 65% loan-to-value is now at 4.57% for second-time landlord borrowers, carrying a £3,999 product fee but including a free valuation and allowing overpayments of up to 20%. Moneyfacts noted the cut strengthened its position as a Best Buy product.
The latest competition isn't limited to mortgages. Savers looking to shield cash from the taxman can now lock in a market-leading 4.67% on a one-year fixed-rate cash ISA from Secure Trust Bank. Depositing the full £20,000 annual ISA allowance could earn more than £900 in tax-free interest over the term, according to Moneyfacts. The account requires a minimum £1,000 and permits additional deposits for 30 days after opening. However, early access triggers a penalty of 90 days' interest and forces account closure. Eastell added: 'The boost to the one-year option sees the account pay a market-leading 4.67%.'