Homebuyers and those looking to remortgage could be in for a treat as HSBC has shaken up the market by launching an incredibly low mortgage rate – but you’ll need a big deposit to qualify.

The banking giant has unveiled a market-leading five-year fixed-rate mortgage at just 3.95%, undercutting rivals NatWest and Nationwide who launched similar deals last week. Experts believe this could be the start of a mortgage price war, with predictions that other big names like Santander, Halifax, and Barclays could soon follow suit.

This move comes hot on the heels of the Bank of England’s recent decision to cut the base rate from 5.25% to 5%, making borrowing cheaper for lenders.

How to bag HSBC’s bargain mortgage

There’s a catch – to get your hands on this incredible rate, you’ll need a hefty deposit of at least 40%. Here’s a breakdown of what’s on offer:

First-time buyers:

• Standard mortgage: 3.95% five-year fix, 60% loan-to-value (LTV), £999 fee, £350 cashback
• Energy Efficient Homes (EEH) mortgage: 3.95% five-year fix, 60% LTV, £999 fee, £1,600 cashback

Home movers:

• Standard mortgage: 3.95% five-year fix, 60% LTV, £999 fee, no cashback
• EEH mortgage: 3.95% five-year fix, 60% LTV, £999 fee, £1,250 cashback

Existing HSBC customers (remortgaging or borrowing more):

• All mortgages: 3.95% five-year fix, 60% LTV, £999 fee, no cashback

What do the experts say?

Nicholas Mendes, a mortgage expert at John Charcol, believes that this move by HSBC will put pressure on other lenders to compete. He said: “This puts HSBC in a prime position in the market. Next, we expect similar moves from Santander, Halifax, and Barclays. August has started with strong competitive momentum.”

So, if you’re in the market for a new mortgage and have a substantial deposit, now could be the perfect time to grab yourself a bargain. Keep your eyes peeled for more deals as the mortgage wars heat up!