HSBC is to lower rates on some of its mortgage products tomorrow, in a bid to attract consumers planning to remortgage.

The bank is also introducing a new five-year fixed-rate product with an interest rate of 5.98 per cent, but this will only be available to customers of its Plus and Premier accounts.

Rates on the standard two-year fixed deal will be dropped by 0.31 per cent, while longer-term mortgages will see a fall of 0.16 per cent.

Fees for both types of loan will be cut to £599.

According to HSBC head of lending Andy Mielczarek, around 750,000 people intend to remortage in the second half of this year and the move is intended to appeal to these by lowering the cost of borrowing.

"Lowering our rates by 0.31 per cent means a saving of almost £500 a year for a homeowner with a £160,000 loan," he said.

Earlier this month Abbey cut rates by up to 0.15 per cent.

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