HSBC has removed fees on its standard mortgages in an attempt to simplify the market, but critics warn that you could still save money by going for a deal with lower interest rates.

The HSBC deal will be available to new and existing customers during August and September who are borrowing up to 90 per cent of the value of their property.

Typically, HSBC mortgage customers pay arrangement fees of £499, but until the end of September they will pay a higher rate of interest instead. A two-year fix will be at 6.69 per cent while a five year fix will have a rate of 6.49 per cent. There are also three and ten year fixes available.

You can opt for two “special” deals which include a fee but have a lower rate of interest – the two-year fix with a £999 fee has a rate of 6.09 per cent.

However, you could save money by going for deals with cheaper rates. Cheshire Building Society, for example, charges £899 for its two-year fix with a rate of 5.69 per cent.

With a £180,000 loan, you would pay a total of £28,630.84 over the two years while with HSBC you would pay £29,803.36 – a difference of almost £1,200.

The move by HSBC follows widespread criticism against mortgage exit fees which are charged when borrowers redeem their mortgage.

Ten years ago, the average fee was just £50, with some lenders not charging at all. Today the average fee is £180 but some lenders charge almost £300.

Consumer watchdogs have also criticised banks for increasing exit fees after a mortgage contract has been signed.

The FSA has ruled that borrowers are entitled to a refund, and should pay only the exit fee stated in their original mortgage contract.

A spokesman for analysts Moneyfacts said: “HSBC seem to be capitalising on the press surrounding exit fees. But when you look at the deal you are not saving much money because other deals are out there which have much lower rates.”

He added: “These products may be attractive to first-time buyers who do not have much extra cash to be paying on all of the charges but the LTV limit is 90 per cent so they will have to get a deposit from somewhere.”

Rob Chesters, head of mortgages at HSBC said: “With some lenders recently bowing to pressure to scrap their exit fees, HSBC has decided to stay one step ahead.

“Our new mortgage offers will fill the void of clear and transparent mortgage deals, the market has for too long concentrated on increasing dubious fees to shore up headline rates.”

A spokesman for HSBC says the new deals will be reviewed at the end of September and their availability will be extended if there is enough demand for the product.