HSBC offers its new mortgages at exceptionally low interest rates

Posted under General by Michael

Britain’s biggest bank, HSBC, is making an effort to lure tens of thousands of harried mortgage customers whose fixed rate deals with other lenders are on verge of expiry.

But the bank has admitted it is exposing itself to offering new mortgages in some instances at what would now be ‘exceptionally’ low interest rates, even below the Bank of England (BoE) current base rate of 5.25 per cent.

The bank estimates that 72 per cent of its eventual customers will be paying a fee of less than £1,000 and that 57 per cent will be paying less than £600. Its deal will remain open to individuals whose fixed rate deals are set to expire by 30 June. The maximum loan will be £250,000.

Mortgage market observers think that it is a great deal for customers coming to the end of their deals who meet the bank’s criteria. The deal is indeed lucrative considering the fact that several other two-year fixed-rate deals are being priced at up to 6 per cent.  Analysts say that potential customers should first compare a quote from HSBC with other comparative deals on offer. How good a particular deal is will largely be determined by the size of the fee, they point out. The biggest fees, amounting to several thousand pounds, will mostly apply to individuals with low rates and big loans.

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