HSBC Mortgage offer (with a fee and conditions)

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HSBC gets a large part of its reserves from its depositors

Britain's biggest bank, HSBC, is offering mortgages to homeowners whose fixed rate deals with other lenders are coming to an end.
HSBC says it will match existing deals for up to two years and for a fee.
Other lenders have been withdrawing their mortgage products, as the credit crisis makes it harder for banks to borrow money.
More than a million households are expected to face higher mortgage bills this year as their special deals end.
Last week, financial data firm Moneyfacts estimated 20% of mortgage products had been taken off the market.
This included HSBC-owned First Direct, which has temporarily withdrawn its entire range of mortgage products to new customers.

Homeowners should hold this latest offer up against what's available from other lenders.


David Hollingworth, London and Country mortgage brokers

It is understood that HSBC, which relies less on the financial markets to raise the funds for its mortgages, is keen to take advantage of the weakness of its competitors in the mortgage market.
The bank is expecting huge demand for its latest offer and will use three times the usual number of staff to handle applications.
Customers will need to have at least 20% of the equity in their home and the fee paid will depend on how much they want to borrow and over what period of time.
David Hollingworth, from mortgage brokers London and Country, told the BBC those coming off fixed rate deals should study HSBC's offer carefully before signing up.
"HSBC has in the past not always been the most competitive in the market," he said.
"Homeowners should hold this latest offer up against what's available from other lenders."

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Re: HSBC Mortgage offer (with a fee and conditions)

The rate+fee equates to 5.36% over two years. It's a better rate than most competitors are offering, but it's not the apparently loss-making bargain that most commentators seem to believe.

Nor is it truly matching the borrowers' existing deal, as the fee means that in total they will be paying a lot more than their old deal's cost over two years.