HSBC has cut rates to 1.14% on higher loan to values benefiting existing homeowners looking to move or remortgage.

Mortgage rates from HSBC are cut to only 1.14% for Loan to Values (LTV) of 60% benefiting home movers and remortgage buyers according to Moneyfacts.

The attractive mortgage deals are based on a 2-year fixed rate until 31 December 2022 with an application charge of £999 and free valuation, requiring a significant deposit or equity of 40%.

Even the 5-year fixed rates are attractive from HSBC with the deal at 1.34% and LTV of 60% until 31 December 2025 after which it reverts to 3.54% variable rate.

For older equity release buyers, rates have also reduced and fixed rates of 2.44% upwards can be secured using a lifetime mortgage for any purchase such as to consolidate debt or purchase a new car.

Rates rising for first time buyers

Rates offered to first time buyers are rising as lenders withdraw products from the market and a 10% deposit mortgage deal starts at 2.44% for a 2-year fixed rate and 25-year term.

Over the past five months during the Coronavirus lockdown mortgage deals available in the market have reduced from 5,222 on 1 March to only 2,526 today.

This table from Moneyfacts shows the number of mortgage deals available during the lockdown period.

Date	Mortgage deals
1 March 2020	5,222
1 July 2020	2,728
1 August 2020	2,526

After the lockdown period, economic uncertainty and redundancies has seen lenders withdraw mortgage deals and raise rates for high LTV products.

For first time buyers with a 90% LTV two year fixed mortgage the average rate is 2.57% in March increasing to 2.90% by July and is 3.07% in August.

Based on a property value of £200,000 with a 10% deposit for a 25-year term the payments have increased by £46.28 per month and would be £1,110.72 in extra costs over two years.

Lower LTV rates could rise

Moneyfacts has found that other mortgage products with lower LTVs of 80%, 70% and 60% have reduced from March to July to the benefit of home movers that typically have higher levels of equity.

Lenders are becoming increasingly cautious as the furlough period is due to end in October exposing them to economic and unemployment risks.

For 80% LTV mortgages the average rates in March were 2.41% falling to 2.13% by July as the country exited lockdown and increased in August to 2.22%.

The average mortgage rates for 70% LTV were 2.51% in March reducing to 2.12% in July and increasing to 2.20% in August also available to buy-to-let investors.

For the highest deposits with 60% LTV mortgages rates these have reduced by 0.14% since March to 1.98% since July with no further changes to date and remain historically low for homeowners.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or a buy-to-let investor.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to maintain your lifestyle or even give to a family member.

Learn more by using the equity release mortgage calculator, mortgage cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.