HSBC is reintroducing its Rate Matcher mortgage offer next week, offering to match or beat existing mortgage rates 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%) the number of homeowners remortgaged in the first three months of 2009 compared with the same period in 2008. 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 customers can secure their mortgage and then delay drawdown for up to six months from when they pay the booking fee. Rate Matcher has three variable options customers can shuffle between: interest rate, length of fixed period and loan to value. Not all options can be mixed together, for instance the lowest rate of 2.49 per cent rate is only available over two years.
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."
Rate Matcher's maximum mortgage size is £250,000, although larger mortgage sizes can be catered for by topping up with an HSBC standard mortgage product. Minimum interest rates apply to each fixed period: 2.49 per cent over two years, 3.49 per cent over three years and 4.24 per cent over five years, with fee ranging from a minimum of £499, to a maximum of £4699. The maximum loan to value available for the offer is 75 per cent.
