From Monday 8 June 2009, HSBC is reintroducing its hugely successful Rate Matcher mortgage offer. HSBC is offering to match or beat existing mortgage rates as low as 2.49 per cent, and fix them for up to five years. Under the offer all UK homeowners can apply no matter what their existing mortgage arrangement. Remortgage activity among homeowners has slowed dramatically since base rates started falling to their current historic low. In fact, less than half (down 52 per cent) the number of homeowners remortgaged in the first three months of 2009 compared with the same period in 2008. Previously, HSBC only offered to match fixed rates but this new deal allows customers on any type of deal to apply. Borrowers have struggled to better their lenders’ standard variable rates, and although keen to fix, they have balked at fixed rate options at close to double what they would pay on a variable basis. HSBC’s new Rate Matcher offer looks to remedy this by enabling homeowners to switch and fix at less than their lender’s standard variable rate or a rate of their choice. The offer is only open for a limited period, however from 8 June, customers can secure their mortgage and then delay drawdown for up to six months from when they pay the booking fee. This means well over one million homeowners either rolling off their existing mortgage deal or already on their lender’s standard variable rate, could switch to a lower rate with HSBC’s Rate Matcher without paying any early repayment charges. Rate Matcher has three variable options customers can shuffle between: interest rate, length of fixed period and loan to value, which will together generate their fee. Not all options can be mixed together, for instance the lowest rate of 2.49 per cent rate is only available over two years. However, typical customers borrowing a market average loan size of £120,000 can borrow at under three per cent and pay a fee of less than £1000. Martijn van der Heijden, HSBC’s head of mortgages said: “With the base rate at its historic low, it’s definitely a case of ‘when’ not ‘if’ mortgage rates will rise. It’s in the interest of the millions of homeowners enjoying exceptionally low mortgage payments to think ahead now and ask themselves by how much would rates need to rise, to seriously impact their lifestyle. Anyone who would struggle to get by on an interest rate of just four or five per cent should really act now.” “One of reasons floating rate mortgage holders have put off fixing their mortgage is that rates on offer are often two to four per cent higher than what they are currently paying, making it a bitter pill to swallow. Our Rate Matcher mortgage gives these borrowers another option and enables them to fix at, or close to, the rate they are currently paying.”
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