Economic conditions change daily and that has resulted in many borrowers hanging in the balance waiting on possibly exquisite deals from area lenders.  The housing market is especially subject to fundamental changes and that is evident in the activity now taking place.  Today, the lowest five year fixed rate mortgage product ever will be announced by HSBC.  The associated deposit and closing fees are massive, but the interest rate is a tiny 2.49%.  Deposit required on this deal is not small at 40% and the fee to finish the deal is 2,000 pounds.

This rate enters new territory for a fixed rate deal as it is the first to dip below 2.5%.  Five year deals have increased in popularity over the last twelve months, spiking by almost 75% in frequency.  Contrasted to a fixed year two year deal, the twenty four month term types have only increased by 33%, according to Moneyfacts.

Sylvia Waycot, editor at moneyfacts.co.uk, commented on the inexpensive deals now being offered by many lenders, saying: "Five-year fixed-rate mortgages have traditionally been a bit too expensive to be the first choice for most of us. However, thanks to lenders enjoying cheap loans from the government this is changing."

Rob Harbron, economist from the Centre for Economics and Business Research, commented on the possibility of the current base rate increasing over the coming months, saying: "Our view is that we won't see a rise in the 0.5% base rate until 2016.  Expectations for continued low rates are a result of our outlook for the economy – weak growth conditions are expected to remain the 'new normal' for the next few years."