Borrowers beating down HSBC’s door for 1.99% mortgage

by John Fitzsimons on 16 September 2009  |  3 comments
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Online traffic and calls to HSBC double thanks to mega-low rate.

Financial hacks tend to be a cynical lot, not easily impressed by much.

But when the information about HSBC's new 1.99% mortgage arrived in our inboxes, there was an audible intake of breath, and raised eyebrows all round.

1.99% is seriously cheap.

As such, the news that following the launch of the product, calls to HSBC and traffic to its website have rocketed, has not been met with quite such surprise. Calls to the HSBC call centres have jumped by 74%, while online traffic has doubled.

This product has done exactly what HSBC wanted it to do - make a serious splash.

It's not difficult to see why it's been so popular. Base rate is likely to stay static for some, so HSBC would be risking some serious public ire if it increased its standard variable rate (which this product tracks). As such, chances are this product will still look very competitive for quite a while yet.

Inevitably there are a few downsides. You need a massive 40% deposit, and you'll be hit with a £1199 fee, so it's not a product for everyone. But it's certainly a start.

Interestingly, Barclays has responded with a mega-low tracker of its own, a one year deal at bank base rate plus 1.48%, so 1.98% at the moment. It will be interesting to see if any more of the big boys follow suit and wade in.