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From 31st July 2008 HSBC will be passing on the benefits of lower mortgage funding  costs to its customers by lowering the arrangement fees and interest rates on its fixed mortgage deals.

Their basic two year fixed rate mortgages will reduce by 0.31 per cent, together with the booking fee dropping from £799 to £599. Longer fixed rate mortgages will fall by 0.16 per cent and booking fees for these loans falling to £599 also.

A new 5.98 per cent five year fixed rate mortgage will be introduced, available to all customers with an HSBC Plus or Premier account with a booking fee of £999. Customers can upgrade to HSBC Plus for £12.95 per month. HSBC will continue to offer its market leading discount and tracker mortgages with rates as low as 4.99 per cent for two years.

Andy Mielczarek, head of lending at HSBC commented, “With an estimated 750,000 people looking to remortgage in the second half of 2008, we are doing all we can to keep the cost of borrowing down. Lowering our rates by 0.31 per cent means a saving of almost £500 a year for a homeowner with a £160,000 loan.”