HSBC offers lifeline to fixed-rate remortgagers

| April 9, 2008 | 0 Comments

HSBC has provided some good news for homeowners on fixed-rate deals that are due to expire, by offering to match their existing terms when they come to remortgage.

Around 1.4 million borrowers are expected to come to the end of fixed-rate mortgages this year, leading to fears of “payment shock” for the many who could face much higher interest rates.

HSBC is well placed to make such an offer because it is less reliant on the money markets for funding than most of its competitors.

As the UK’s largest bank, it is in the enviable position of having large customer deposits which it uses to back its mortgage business.

The offer will last for five weeks; although there is a possibility that it will be extended.

Applicants need to have a minimum of 20% of equity in their property and the majority will pay a fee of £999 or less.

Analysts are expecting other lenders to lose out to HBSC, which currently holds only three per cent of the home loan market.

However, the UK mortgage sector is currently difficult to predict, and some would say a little mysterious; it was only last week that First Direct, a subsidiary of HSBC, closed its doors to new borrowers.

Administration staff were apparently overwhelmed by new applications.

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