Money News
Britain's largest bank, HSBC, is throwing down a mortgage gauntlet to its rivals (and exploiting their current market weakness as the credit crunch grinds on) by pledging to match borrowers' expiring fixed rate deals for a further two years.
The Rate Matcher offer, due to be rolled out to would-be HSBC customers on April 14th, will last through May 18th. Borrowers however will have to stump up a minimum deposit of 20%, as well as pay a large fee. The bank estimates that 72% of its eventual customers will pay a fee of less than £1,000, while 57% will pay less than £600.
The offer will be open to people whose fixed rate deals are due to expire by June 30th this year and the maximum loan will be £250,000.
Customers with loans larger than £250,000 can still make use of their Rate Matcher allowance and top up with another HSBC mortgage for the rest of their required funds. They can also choose from HSBCs other offers as existing offers may work out more suitable.
From April 14th HSBC mortgage offers will include a 5 year fix at 5.39% with a fee of £999, a 2 year discount mortgage at 5.43% with a £999 fee and a remortgage lifetime tracker at 5.73% with a £599 fee.
That HSBC can launch such an initiative at all stems in large part from its lesser reliance on the wholesale money markets for mortgage funding than its major competitors. And of course it has the scale to do so too.
Meanwhile, it expects tens of thousands of borrowers to take up the offer and has tripled the usual number of staff to cope with the expected demand.
09 April 2008 © Moneyextra.com
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