HSBC has launched a record low five-year fixed rate mortgage at 1.69%.

Borrowers would need a 40% deposit and a £999 fee but it is the lowest rate currently on the market for a five-year term.

Borrowers have been spoilt for choice on fixed rate mortgages in recent months, but often rates are so popular that they quickly disappear.

Atom Bank launched a record low five-year fixed rate of 1.29% on April 11 that only lasted nine days.

David Hollingworth, mortgage expert at L&C Mortgages, said: “This is yet another signal that the mortgage market is more competitive than ever and lenders are scrapping it out to attract business, whether it’s from those buying their first home, moving house or looking to switch to a better deal.

“More lenders fighting for business means that they need to stand out from the crowd and truly differentiate themselves. This, coupled with some easing in cost of funds, is forcing lenders to offer rates that demand attention.

“As a result, lenders are squeezing whatever they can out of their deals and offering more and more eye-catching rates.”

He warned that some borrowers were waiting to see how rates go rather than grabbing the rates on offer, “which can be a dangerous game”.

He said: “Ironically, this means some borrowers are playing a waiting game rather than grabbing the opportunity in front of them.

“Our research found that more than a third of borrowers are languishing on standard variable rates despite the fact that ultra-low mortgage rates are widely available.“