HSBC To Further Help First Time Buyers

HSBC has committed a further £350 million for mortgages for those with a small deposit, including first time buyers.

During 2011, HSBC has provided a mortgage to 1 in 8 first time buyers and is now reserving a minimum of £250 million to further help this group of home buyers.

HSBC is allocating a total of another £350 million to borrowers with equity or a deposit of 15% or less. The maximum loan to value amount available is 90%.

New mortgage rates for customers with a 10% deposit include:

• 4.09% above base rate lifetime tracker (current pay rate 4.59%) (fee free)
• 4.49% two year fixed (fee free)
• 4.89% five year fixed (fee free)

New rates for customers with a 15% deposit include:

• 3.49% above base rate lifetime tracker (current pay rate 3.99%) (fee free)
• 4.29% two year fixed (fee free)
• 4.69% five year fixed (fee free)

A recent HSBC survey found that 78% of all non-home owners who have never bought before aspire to be homeowners and as Peter Dockar, Head of Mortgages at HSBC, comments: “Today’s announcement of fee free rates and a pledge to make a further £250m available to FTBs in 2011 shows HSBCs commitment to continuing to help people get on the housing ladder.”

MoneyHighStreet comments: “This additional mortgage funding, particularly that focused on those with a small deposit, is clearly welcomed.

On the face of it the new mortgage rates do look attractive. Some will find them particularly so as they are fee free. As with all financial products though do make sure you do your research to get the best deal for your needs. Understand the different types of mortgage available, such as discount and variable mortgages, fixed rate mortgages and tracker mortgages.

There are also offset mortgages, with which you can potentially knock years off your mortgage as the interest is paid on savings at the same rate paid on the mortgage and interest earned on savings is offset against the mortgage payments.