HSBC is set to offer homebuyers with two fixed-rate home loans of up to 95% loan to value (LTV) under the government’s Help to Buy scheme from 25 November.
The two loans include a two-year fixed-rate deal with an interest rate of 4.79% and a five-year deal fixed at 4.99%, with a booking fee of £99.
The mortgages offered by HSBC will be initially only for customers looking to buy a property, with plans to extend the loans to remortgagers in future.
In order to avail the loan, borrowers are required to prove that they can afford repayments at an undisclosed interest rate, which is higher than the Bank of England base rate.
HSBC UK retail banking and wealth management head Brendan Cook said they want to support their customers, whether they are buying their first home or moving up the housing ladder.
"In order to protect them, we want to ensure they can afford their repayments when interest rates rise," Cook added.
The deals offered by HSBC are cheaper than those offered by RBS, and its subsidiary NatWest, and Lloyds’ Halifax.
RBS and NatWest are offering a two-year fixed-rate deal with an interest rate of 4.99% and a five-year deal fixed at 5.49% without any booking fees. Halifax is offering two two-year deals, where one has a rate of 5.19% and is charged with £995 fee, while the other has a rate of 5.59% without any fee.