uSwitch.com says that HSBC’s launch of the lowest ever five-year fixed term deal on the market “offers homeowners a glimmer of hope in the face of rising living cost”.

The independent price comparison and switching service said the deal was “great news” for homeowners looking for security and protection against future rate rises.

“Although it may be another year before the base rate rises, the only way for mortgage rates to go in the long term is up,” said Michael Ossei, personal finance spokesperson at uSwitch.com.

“The launch of these lowest long term five and seven-year fixed rate mortgages from HSBC will offer peace of mind without the sting in the tail of a high rate.

“However, people have to understand that with long term fixed deals there has to be a trade-off – a low rate against higher arrangement fees. And this great rate won’t be available to all – in fact with a 60% LTV and with a pretty hefty arrangement fee of £1,499, this mortgage could still be out of reach for many. First time buyers especially may struggle. But with such a low rate, and the ability to fix for five or even seven years, we may see a sharp fall in people choosing a tracker mortgage.”

Ossei hopes the product launch will “kick-off the battle to win new customers”.

He added: “Increased competition in this part of the mortgage market could also lead to a further fall in the fees and rates for longer term fixed mortgages, meaning that those who want to budget and prepare themselves for an increase in rates won’t be too heavily penalised.”