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NEW fixed rate mortgages at less than 4% interest

Learn more about the new fixed rate deals available with HSBC, Lloyd's Bank and Virgin Money

A photo of Grace Lynch, the author

By Grace Lynch

Published on: 13 February 2023

4 min read

NEW fixed rate mortgages at less than 4% interest

Saving is key for most households at the moment, especially when it comes to big monthly expenses like mortgages.

If you have been looking for a mortgage in the last year, you have probably been frustrated that interest rates have climbed higher and higher.

You never want to pay too much for your mortgage, and the good news is there are now 3 NEW fixed rate deals available with interest rates lower than 4%. HSBC and Virgin Money are currently battling to be the lender offering the lowest rates on the market (and Lloyd’s Bank deserve an honourable mention here too).

What is a fixed rate mortgage?

The first question you might have is what a fixed rate mortgage is, particularly if you’ve never applied for a mortgage before.

Put simply, a fixed rate mortgage is when a mortgage lender will offer you a set interest rate on your mortgage for a fixed number of years. Most often this will be 2, 5 or 10 years.

Benefits of a fixed mortgage rate include:

  • Able to budget for years as your mortgage repayments won’t change
  • Avoiding paying the lenders Standard Variable Rate (SVR) which could cause your repayments to increase or decrease over time
  • Protection against any future interest rate rises

What are the new HSBC mortgage rates?

The key details for HSBC’s new mortgage are:

  • You can get a 5-year fixed rate of 3.99% with HSBC
  • You can only access this new rate if you are remortgaging
  • You will need to be borrowing up to 60% of the property value at most

Note: Remember any fixed rate deal will automatically swap to a lender’s standard variable rate or ‘SVR’ when the fixed period is over. This could mean significantly higher monthly payments. If you are coming to the end of a fixed rate deal, you might want to think about remortgaging to avoid higher costs.

What are the new Virgin Money mortgage rates?

There are 2 new mortgages that have been announced by Virgin Money recently. These are:

  • 10 year-fixed rate mortgage at 3.99% interest
  • 5 year-fixed rate mortgage at 3.96% interest

With their 5 year-fixed rate deal, Virgin Money has the lowest rates available for mortgages right now. If you were looking to buy soon, you might want to look at what Virgin have to offer as a mortgage provider.

Note: If you choose a 10 year fixed rate, you may choose to remortgage later if interest rates drop. Check your mortgage documents carefully, to see if there are fees (early repayment charges) that may need to be paid if you do this. 

What are the new Lloyd’s Bank mortgage rates?

Lloyd’s Bank was one of the first to offer lower mortgage rates following last year’s Autumn mini budget.

Key facts about this mortgage include:

  • You can get a 5-year fixed rate of 3.99% with Lloyd’s Bank
  • You can only access this new rate if you are remortgaging

Which lender has the lowest mortgage rates?

At the minute, Virgin Money comes out on top, with their 5-year fixed rate mortgage having an interest rate of 3.96%.

This is brilliant news for borrowers, as this mortgage is available for both new mortgages and remortgages. Lower interest rates should in theory equal lower monthly repayments and big savings.

How do I choose my mortgage lender?

Finding the best mortgage isn’t always easy. Choosing your mortgage lender is a big decision and a very important one. You will be tied into your mortgage for many years, so it is a good idea to take some time and consider all your options.

HSBC, Virgin Money and Lloyd’s Bank all have excellent rates on offer right now. There will be pros and cons for each of these lenders though.

Some lenders are simply better than others for certain buyers (e.g. first time buyers) and financial backgrounds (e.g. low credit score, debts or poor credit history).

One of these lenders could be a great choice for you, but there could be a better choice elsewhere even if the interest rate is slightly higher. It could even be that a fixed rate isn’t quite right for your mortgage and a variable or tracker mortgage would be more suitable.

RECOMMENDATION: Don’t make the mistake of jumping into a fixed rate deal based solely on the lower interest rate. You should look at all aspects of the mortgage and the lender before making any decisions.

If you need any help and advice, you can speak to an independent mortgage expert for support and guidance.

Resources – Support for Mortgage Interest (SMI)

Bank of England – Interest rates and Bank Rate

Statista – Average mortgage interest rates in the UK (March 2000-January 2023)

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