Date Published 20 August 2012
HSBC, which made waves by introducing the lowest-ever five-year fixed rate, pulled the product yesterday – after just one month.
The mortgage, which drew huge media coverage, was aimed at borrowers with a 40% deposit, offering a fixed rate of 2.99% for five years with a booking fee of £1,999.
The deal prompted a price war. Santander matched the rate, charging a £1,495 arrangement fee, before NatWest beat it with a 2.95% five-year fix with a fee £2,495. Nationwide responded with a four-year fix at 2.89%.
A spokeswoman for HSBC said: `We have simply reached the end of funding after one month. The money allocated for the product has been used.`
She added: `It was designed to bring in business. We knew it would be popular.`
From today, HSBC will be offering a five-year fix at 3.29%, but will cut the fee from £999 to £499.
Santander said it has no immediate plans to withdraw its rate, and NatWest also said its loan remains available.