HSBC launches sub-4% mortgage for first-time buyers

| November 24, 2011 | 0 Comments
HSBC launches sub-4% mortgage for first-time buyers

HSBC claims to have launched the only mortgage with a rate of less than 4% for first-time buyers and has also promised to make a further £350m available to borrowers with smaller deposits by the end of the year.

It latest mortgage offers a rate of 3.84% for two-years to borrowers with a deposit of between 10 and 15 per cent.

This is 0.1% lower than HSBC’s standard variable rate (SVR), which currently stands at 3.94%.

However at the end of the two-year period, the mortgage will move to the SVR which could be a significant disadvantage.

The cost of the mortgage could increase if HSBC decided to change its SVR, which it is entitled to do whenever it wishes.

First-time buyers who want the security of knowing their monthly repayments will remain at an affordable level might find a fixed-rate deal more suitable.

With the Bank of England base rate currently at 0.5 per cent, a tracker mortgage could also be an attractive option.

Tracker mortgage rates move in line with the base rate.

One advantage of HSBC’s latest offering is that there are no fees attached.

HSBC’s head of mortgages Peter Dockar said: “We recognise that first-time buyers need help so as well as great rates with no fee options, we offer our customers a free mortgage advice service in branch to help them get the right deal for them.”

Yesterday HSBC warned the Treasury Select Committee that the Independent Commission on Banking’s proposed reforms would cost it around $2.1 billion.

If the proposals go ahead and the bank is forced to raise extra debt capital as insurance against losses, it could move its headquarters out of the UK.

HSBC moved its headquarters from Hong Kong to the UK 20 years ago, after taking over Midland Bank.

Tags: , , sub-4% mortgage

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