UK lender HSBC cuts mortgage rates

LONDON: British bank HSBC said it is lowering interest rates for its fixed-rate mortgage loans in response to a fall in funding costs. HSBC, the UK's biggest bank by market capitalisation, is from Monday cutting its standard two, three and five year fixed-rate loans by 0.56 percentage point to 6.27 percent.

The rate for loans on the same terms with a 799 pound fee fall by 0.46 percentage points to 5.97 percent. HSBC said the reductions reflect a decline in borrowing costs in the wholesale markets, which have lowered the bank's own funding costs.

The bank estimated that the latest rate reductions are worth 500 pounds a year to the average mortgage holder. HSBC had a 7 percent share of the British mortgage market in the first half of this year, a spokesman for the bank said.