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Rate Matcher deal to attract new customers.


HSBC has announced it is relaunching its Rate Matcher deal under which it will offer mortgages with interest rates as low as 2.49 per cent.

The global banking giant said it would match or beat the existing mortgage rate being paid by any homeowner looking to borrow up to 75 per cent of their home's value down to a rate of 2.49 per cent.

The offer, which is being launched on June 8 and will run for a limited time only, is targeting customers who are currently on their lender's standard variable rate, which is as low as 2.5 per cent in some cases.

It follows a similar deal run by HSBC in 2008 under which it promised to match the existing rate of people coming to the end of fixed-rate mortgage deals.

Remortgaging activity has slowed dramatically since the Bank of England began to aggressively cut the base rate.

It was running at less than half of last year's level during the first quarter of 2009, as many homeowners struggled to find a new mortgage rate that was as low as the SVR they had reverted to when their existing deal ended.

HSBC said its offer was open to all homeowners, regardless of whether they were currently on a fixed, tracker or SVR rate.

But people must have at least a 25 per cent deposit and can only borrow a maximum of pounds 250,000, although those with larger mortgages can borrow up to this level and then top up their loan with a standard HSBC mortgage.

People will be able use the group's Rate Matcher calculator, which will be available on its website, to find a mortgage that best suits them.

They can choose between different interest rates, loan to value ratios and the length of time over which the rate is fixed.

Different fees will be charged according to the deal people select, with these ranging from a minimum of pounds 499 to a high of pounds 4,699 for someone borrowing the maximum pounds 250,000 at the lowest rate of 2.49 per cent with a 75 per cent LTV.

The group said a typical borrower with an average loan size of pounds 120,000 would be able to get a rate of less than three per cent and still have a fee of less than pounds 1,000..

The 2.49 per cent rate can only be taken out over two years, with a minimum rate of 3.49per cent for three-year fixed rate mortgages and a 4.24 per cent one for five-year ones.

Once people have secured their mortgage and paid their arrangement fee, they can delay drawing down the loan for up to six months to avoid paying early redemption charges on their current deal.

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." HSBC announced earlier this year that it had allocated pounds 15 billion for mortgage lending during 2009, double the level it lent in 2007.

Louise Cuming, head of mortgages at, said: "Again HSBC is leading from the front. It has been clear for some time that HSBC is looking to cement its place as a serious player in the mortgage market.

"For some borrowers this deal will represent a significantly lower rate than the SVR their current lender is offering and the six month drawn down delay offers real flexibility for many still on an existing deal.

"However, the maximum LTV of 75 per cent severely limits the deal's audience and for those with the equity, a hefty up front fee is likely to prove quite a deterrent.""It's in the interest of the millions of homeowners enjoying exceptionally low mortgage payments to think ahead now


HSBC said it will match or beat the existing mortgage rate for loans up to 75 per cent of a home's value down to a rate of 2.49 per cent
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Publication:The Birmingham Post (England)
Date:Jun 5, 2009
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