HSBC cuts rates on 100 mortgage deals as chaos subsides

HSBC has cut mortgage rates on 100 deals as chaos subsides in the market following the mini-budget.

Santander has also slashed some of its fixed-rate mortgages by up to 0.59 percentage points and launched a new two-year deal at 4.84pc, one of the cheapest on the market.

It comes as mortgage rates have now fallen to their lowest in more than three months after lenders reduced the cost of deals in an escalating price war.

HSBC yesterday reduced rates on 100 of its deals by up to 0.1 percentage points, while Yorkshire Building Society cut its fixed-rate mortgages by up to 0.75 percentage points on Monday.

The price war between lenders has reduced the average two-year fixed rate to 5.58pc, its lowest since Oct 2 when the typical two-year deal was priced at 5.43pc, according to analyst Moneyfacts. On Oct 3, the average rate jumped to 5.75pc as markets and lenders priced in the raft of tax cuts promised in the mini-budget at the end of September.

Two-year fixed rates peaked at 6.65pc towards the end of October. The average five-year rate has also dropped to 5.39pc – the lowest level since Oct 2.

Adrian Anderson, of mortgage broker Anderson Harris, said banks were “jostling for mortgage business” with new lending targets to hit this year.