HSBC cuts mortgage rates below 5% as average fixes hover just shy of 6%

HSBC has trimmed its mortgage rates by up to 0.19 percentage points, reviving sub-5% deals that had nearly vanished from the market last month. Its cheapest two-year fixed rate now sits at 4.99%, though borrowers must have at least 40% equity to qualify. Average fixes remain close to 6%, heaping pressure on buyers and those coming off cheaper deals secured earlier this year.

Sub-5% mortgages had almost entirely disappeared in early October — Moneyfacts recorded just nine still available across the market.

Conflict in the Middle East has pushed energy costs higher, fuelling inflation fears and leading markets to price in further Bank of England rate rises from their current 3.75%.

At the start of 2026 most borrowers were able to lock in rates below 4%, with two-year fixes going as low as 3.5%.