HSBC introduce Rate Matcher mortgage product

Permalink: HSBC introduce Rate Matcher mortgage product
by Kay Murchie

HSBC, Britain’s largest bank, is trying to attract those re-mortgaging by offering to match the interest rate of any borrower whose fixed-rate deal is near to expiry.

From Monday 14 April, the bank will match peoples’ expiring fixed-rate deals for a further 2 years. The offer will apply to both HSBC customers and those with mortgages elsewhere.

HSBC forecasts that over half of borrowers will pay a fee of £599 or less and that 75% will pay less than £999. A loan of £190,000 at a fixed rate of 5.19% comes with a fee of £599.

Others may face much larger bills, a fee calculator is due to go live on Monday. At first, the maximum fee will be £4,099 for a £250,000 loan at 4.54%. However, a spokesperson for HSBC said this may increase to £5,000 if its own borrowing costs rise while the offer is open.

A maximum of £250,000 can be borrowed, although those customers with larger mortgages can borrow up to this level via the Rate Matcher service and take the remainder on a standard HSBC deal.

The offer is only available for borrowers whose current mortgage deal runs out before the end of June so people are advised to act quickly to take advantage of this offer. HSBC is expecting huge demand for this offer and will use three times the usual number of staff to deal with applications.

Figures show that approximately 1.4 million borrowers will see their fixed-rate or discounted deal expire this year resulting in a huge payment shock.

There are now just 4,270 different mortgage deals on the market, compared with 15,599 last July. Consequently, those re-mortgaging are finding it difficult to find cheap deals that match their existing one.

HSBC’s Rate Matcher will mean their existing fixed mortgage rates (down to a cut-off point of 4.54%) will continue for a further two years.

It is only available direct to consumers as the bank does not offer its mortgage products through mortgage advisers. Borrowers can borrow up to a maximum of 80% of their property’s value and a fee will be payable depending on the rate fixed.

The offer is available from 14 April until 18 May.

Aaron Strutt from mortgage brokers Chase De Vere said it is a great deal for customers coming to the end of their deals who meet HSBC’s criteria while Sean Gardner of comparison website MoneyExpert.com said HSBC’s move was a breath of fresh air.