HSBC mortgage ‘rate matcher’ returns

The HSBC mortgage ‘rate matcher’ deal is returning from 8 June – a great mortgage deal whereby HSBC offers to match or beat an existing mortgage rate.

Regardless of any existing mortgage arrangement, all UK homeowners can apply for the mortgage ‘rate matcher’ deal.

HSBC offers to match or beat an existing deal with rates as low as 2.49% which can be fixed for up to 5 years.

Currently, whilst a lot of mortgage deals are coming to an end, homeowners are often defaulting to their lenders standard variable rate (SVR) as these are seen as the best option compared to higher rates being offered on many fixed rate mortgage deals.

With HSBC offering the ‘rate matcher‘ deal homeowners now have an option to switch and fix at a rate that is at least close to what they currently have.

HSBC’s head of mortgages, Matijn van der Heijden, 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.’

As a sign of the pressure growing on mortgage rates it is worth pointing out that since March 2009, swap rates for 5 year mortgages have increased by 10%.

Swaps are used by lenders to ’swap’ their funds onto a fixed interest rate and lend on to homeowners.

The HSBC ‘rate matcher’ mortgage will only be available for a limited period. Customers though can secure their mortgage and wait up to 6 months to draw on it.

There are 3 components to a ‘rate matcher’ mortgage – interest rate, length of fixed rate period and loan to value percentage – and these together determine the mortgage fee.

The lowest mortgage rate of 2.49% is only available on a 2 year fixed.

It’s certainly encouraging to see this innovative mortgage product back from HSBC.