HSBC announced plans to lower down mortgage rates to 0.99 per cent, its lowest offering to date in hopes of initiating a price war to further reduce the cost of home loans.
HSBC, one of Britain's biggest banks offer is the cheapest in the country, according to mortgage experts.
The cheap loan may lead to more people buying home loans and consequently a boost in sales in the housing industry-which requires a much needed push after a stagnant summer this year.
According to Andy Haldane, one of nine lawmakers that oversee the Bank Rate, several factors affected the sluggish economy movement this year including low wage growth in Britain, declining oil prices and other global risks like ongoing tension in Ukraine, Hong Kong as well as the Ebola crisis.
"Interest rates could remain lower for longer, certainly than I had expected three months ago," Haldane reiterated in a speech in Kenilworth.
After the Bank of England claimed that interest rates may remain low because of "gloomier" economic forecasts, sure enough, HSBC put out its cheapest offer yet.
According to mortgage brokers, borrowers who avail of a 150,000 euro loan could save as much as 3,500 to 10,000 euros per year by grabbing HSBC's offer.
Aside from that, Mortgage brokers also predict that because of the bumper-to-bumper competition between different banks besides HSBC, borrowers are also given several cheap options from other before the year ends.
"This is a massive price cut, it's an astonishingly low rate and will allow some families to cut huge amounts off their bills," said David Hollingworth of brokerage London & Country.
"The summer is always quiet in the property market, but no lenders are showing an appetite to fight for business-and that competition is excellent news for home owners and property prices," Hollingworth added.
Bank Rate is now at 0.5 per cent and is still predicted to increase in late 2015 letting borrowers savor the lower costs for a longer period of time.
