The guarantee will be available to HSBC customers coming off fixed rate deals until 30 April 2008 and is intended to help borrowers cope with potential rate shock.
The guarantee will allow borrowers to re-fix over one, two, three or five years on the same rate as before.
Customers will have to pay a fee to match their old fixed rate, with the fee dependent on the length of the fixed term and their current rate. HSBC has estimated that over 93 per cent of its customers will have a fee of less than £500 to pay.
Martijn van der Heijden, head of mortgages for HSBC, said: “The Bank of England has warned debt repayments as a proportion of household income are at a 15 year high, and with 1.4 million home owners facing steep increases in mortgage payments in 2008, this stretch is likely to become worse.
"To remedy this, HSBC’s RateMatcher offer is designed to smooth out the ups and downs of moving between mortgage deals and create a sustainable platform for homeownership.”
Alan Lakey, partner at Highclere Financial Services, commented: “This smacks of being a loss leader. If it is going to offer the same interest rate, with the same application fee, the lender must be losing money, unless there’s something more to it or it cross-sells products.
“The markets tell us what the swap rates are. There is a degree of desperation in this move by HSBC, but saying that, it’s an interesting turn of events although I don’t think any other lenders will follow.”
