The bank – the only lender not to pass on the latest base rate rise – has discovered that many lenders are taking ‘extra’ interest from unsuspecting customers.
Most variable rate mortgages are linked to the Bank of England base rate and move up as well as down. But as HSBC’s calculations reveal, since mid-2000 almost all of the country’s biggest lenders have actually INCREASED the margin between their variable rate and the base rate — by as much as 24 per cent.
That means that a typical borrower with a £100,000 mortgage with the UK’s largest lender, Halifax, is now charging 15 per cent MORE margin than they were three to four years ago. And that’s bad news for loyal mortgage customers. HSBC meanwhile is actually charging 57 per cent LESS in margin — meaning it’s now even better value.
But while lenders seem happy to take extra interest from their borrowers, their customers seem happy to turn a blind eye. According to HSBC research, eight out of ten don’t consider remortgaging even when prompted by a base rate rise.
"Borrowers are being short-changed," says Clive Wood, HSBC’s head of banking and mortgages. "It’s a form of stealth interest, blinding customers with special deals to attract new business then increasing the relative cost of buying a home when their backs are turned. It's not fair, transparent nor customer driven. And underlines the fact that not all banks are the same."
While all other top 10 lenders increased their variable rates following February’s base rate rise, HSBC has held its ‘best on the High Street’ Home Buyer mortgage at a rate-busting 4.74 per cent (4.99 per cent APR). Keeping its variable mortgage rate this low is saving the average, £100,000, mortgage borrower nearly £15 a month — or £180 a year.
For more information about this and other HSBC home buying services visit us at www.hsbc.co.uk or call us on 0800 494 999 (textphone 0800 028 0126). Lines are open from 8am to 10pm every day except Christmas Day, Boxing Day and New Year’s Day.
