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HSBC Mortgage Rate Matcher Rescue Offer- Smoke and Mirrors?

Personal_Finance / Mortgages Apr 09, 2008 - 11:05 PM GMT

By: Nadeem_Walayat

Personal_Finance

Britain's biggest and most profitable bank offers to rescue mortgage borrowers who's fixed rates expire this year to high variable rates, with an offer to match their maturing fixed rates down to 4.5%.

HSBC Remortgage Offer Specs


  • Agree to match maturing fixed interest rates to a minimum of 4.5%
  • Max loan £250k
  • Transfer Current Account to HSBC
  • Require Minimum 20% equity
  • Fix Match period is for 2 years
  • Arrangement Fee charged of as much as £5000
  • Offer open to 30th June

HSBC awash with profits and high savings ratios from asian markets is intent on expanding its small UK mortgage book. HSBC aims to pick up the best mortgage clients from the likes of Northern Rock and other cash starved distressed mortgage banks.

However, taking account of the high arrangement fee of up to £5k on a £250k mortgage (2%), the effective minimum rate of interest charged in the first year of the 2 year fix is estimated at 6.5%, which is much higher than the headline rate of 4.5%. Further details of the Mortgage Rate Matcher will follow from HSBC on 14th April 08.

Some 1.4 million fixed rates expire this year, and the HSBC offer is unlikely to appeal to more than 5% of that market, despite further extensions on the offer during the year. Therefore this offer is unlikely to have any significant impact on mortgage borrowers in terms of volume and low rates of interest, the only real winner here is HSBC Bank.

The UK housing market in March completed the 8th month of its bear market that is forecast to fall by 15% by August 2009.

By Nadeem Walayat

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Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 120 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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Comments

Sarwer
31 Jul 08, 10:21
HSBC loans

I have bad experience of getting a loan from HSBC mortgage company they charge too much panelty and interest.

thanks


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