HSBC withdraws lowest-rate mortgage deal

A five-year mortgage deal which had a record low rate when it was launched a month ago was withdrawn from sale today.

HSBC said its 2.99% mortgage offering has been taken off the market as it has used up all the money allocated to fund it.

The bank declined to say how much money it had lent at this rate or how many successful applicants there had been.

It said borrowers will still be able to apply for a similar deal, which carries a slightly higher rate of interest at 3.29%.

An HSBC spokesman said of the deal: "It was market-leading, so it was always going to be attractive."

Comparison website Moneyfacts previously said HSBC's five-year fixed rate of 2.99% was the lowest it had ever recorded for this type of mortgage when it was launched a month ago.

Borrowers needed a hefty 40% deposit to take it out.

Several lenders have launched similar low-rate mortgages in recent weeks, but much of this increased competition has been aimed at people with larger amounts of equity who are seen as less "risky" borrowers.

People with smaller deposits are expected to have a tougher time taking out mortgages in the coming months in the uncertain economy.

The Bank of England and the Treasury recently launched a "funding for lending" scheme to unclog the flow of credit.

PA