HSBC ups lending for those with 10% deposit

HSBC is boosting the UK mortgage market with extra cash for buyers with a 10% deposit.

The bank is promising to increase mortgage lending in this category by £500 million, taking its total commitment for 2009 to £1.5 billion.

The move will be particularly helpful to first-time buyers, many of whom have been excluded from the property market by fierce loan-to-value ratios that mean only those with 25% or more to put down get an attractive interest rate.

Head of mortgages, Martijn van der Heijden, is clearly proud of HSBC’s mortgage lending record during the credit crisis.

The group became the UK’s largest net lender during the six months to the end of June and Mr van der Heijden says he is “reinforcing this commitment with a huge increase in the funds available for both first-time buyers and home movers”.

Earlier this month HSBC launched a two-year discount deal at 1.99% for those with a 40% deposit, although borrowers with at least 25% to put down can benefit from a discounted rate of 2.49%.

However, both loans come with an arrangement fee of £1,199.

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