Many industry observers predicted that interest rates would rise throughout 2014, with some projecting the 30-year fixed-rate mortgage interest rate to top 5% in 2014. As it turns out, they were dead wrong.

Interest rates stayed low for most of the year, and ended the year well below 4%. According to Freddie Mac’s last primary mortgage market survey of 2014, the 30-year FRM ended the year at 3.87%. At the end of 2013, the 30-year FRM sat at 4.53%.

We may think that our sub-4% rate is pretty great (and it is) but we can’t hold a candle to what’s going on in England right now.

According to a new report from The Guardian, HSBC is offering what some are calling England’s “new record low” interest rate, 1.29%.

Yes, you read that right.


Now, the deal does come with some caveats, of course. According to the Guardian article, the loan is a two-year fixed-rate loan and restricted to borrowers with a 40% deposit, and requires a fee of £1,499 (or roughly $2,300).

Additionally, First Direct, a subsidiary of HSBC, is offering a five-year loan with an interest rate of 2.39%. According to the Guardian, “this is understood to be the lowest ever five-year fix, cheaper than a 2.44% deal offered by Yorkshire building society last year.”

But that loan comes with conditions, too. The maximum loan-to-value ratio on for the loan is 65% and it includes a fee of £1,450 (approximately $2,200).

First Direct is also apparently offering a three-year ARM at 1.99%.

From the Guardian article:

Banks and building societies have been rushing out decade-long fixed-rate mortgages, with experts attributing this to plunging inflation and a growing expectation that interest rates will stay low for longer.

According to the Guardian, mortgage competition among lenders in England has turned intense in recent years, with lenders offering up new and creative loan options to try to entice borrowers.

“Some of the rates on offer are very attractive,” David Hollingworth, of mortgage broker London & Country, told the Guardian. “I think it indicates a continuation of the trend that fixed rates are falling. There are a lot of very attractive deals out there, and lenders are competing hard.”

HSBC has gotten into a decent amount of legal trouble on this side of the pond for its mortgage practices prior to the financial crisis.

In September, HSBC reached a settlement with the Federal Housing Finance Agency, and was ordered to pay $550 million to Fannie Mae and Freddie Mac for violations private-label mortgage-backed securities laws from 2005-2007.

In July, HSBC was ordered to pay $10 million over charges that it defrauded taxpayers by submitting inflated bills to process residential foreclosures.

HSBC was also one of the targets of September lawsuit from the state of Virginia, which sued 13 lenders seeking $1.15 billion in damages. In the lawsuit, Virginia accused the banks of fraudulently misleading the Virginia Retirement System during the sale of residential mortgage-backed securities to the state retirement fund.

It’s certainly not illegal or criminal to offer up low interest rates, so we say “good on you” to HSBC. Now bring some of that low interest rate goodness over to our neck of the woods. Sub-4% is certainly nice, but it ain’t 1.29%.