Don't miss out on HSBC's 1.99% mortgage

by Ed Bowsher on 27 October 2009  |  1 comment
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HSBC says its 1.99% mortgage will be withdrawn on Saturday. So get your skates on and apply now! If you miss the deadline, look at deals from Woolwich and Northern Rock.

The launch of HSBC's 1.99% mortgage really shook up the mortgage market last month. Sadly, the deal is going to be withdrawn on Saturday. 

But if you fancy a super-cheap mortgage, it's not too late to apply! HSBC tells me that if you apply on Friday and you meet the bank's lending criteria, you'll still be able to get the mortgage. 

Now I should warn you that HSBC has been accused of 'cherry picking' the best customers over the last two months, and that trend may only get worse during the final days of the offer. But the offer is so good, I'd say that if you have a 40% deposit, a solid income, and a good credit record, it's worth applying. Get cracking now! 

Just be aware that you may not discover whether your application was successful for six weeks and you may get turned down in the end. 

What are the alternatives? 

If you can't get an application in by Saturday, there are some good alternatives out there.  I really like the 2-year tracker deals from Woolwich and Northern Rock. 

Woolwich has a 2-year tracker deal at 2.79% where you only need a 30% deposit. The nice thing about Woolwich's mortgage is that it's a lifetime tracker, so if the base rate stays low for several years, you could stay on Woolwich's tracker*. And if you want to leave the deal during the 2-year period, you'll only have to pay a 1% exit fee. 

Northern Rock has an even cheaper 2-year tracker at 2.69%. Once again, you'll need a 30% deposit. 

The big plus point is that it's a very flexible deal, so you can overpay almost the whole mortgage balance if you wish. On the downside, it's not a lifetime tracker. You'll be moved to Northern Rock's standard variable rate at the end of the 2-year period. And if you want to leave the deal early, you'll have to pay a chunky 4% exit fee.

If you'd prefer to have the security of a fixed-rate mortgage, check out the best deals at our mortgage centre.  

It's a shame that HSBC is withdrawing the 1.99% offer, but there are other good deals out there, so I don't see this is as a disastrous day for UK mortgage borrowers. 

* Woolwich's mortgage tracks Barclays Bank Base Rate. This rate historically tracks the Bank of England's base rate but it gives Woolwich the opportunity not to track the Bank of England's base rate if it chooses to.

• Apply here for HSBC's 1.99% mortgage. If you'd like advice on the best approach for you and your circumstances, speak to a broker at lovemoney.com mortgages.
   
• Check out more of my blog posts
  
  

         Video: getting through the mortgage maze