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HSBC courts first-time buyers with 90% mortgages
Tuesday, 14 April 2009
Writes Hazel Cottrell
hazel.cottrell@consumerchoices.co.uk
Struggling to find a good value mortgage with a small deposit? Your luck may be about to change as today HSBC launched a new range of mortgages, available to borrowers with deposits of just 10%
First-time buyers with small deposits may now find it easier to secure a mortgage deal, as HSBC (www.hsbc.co.uk) has increased the maximum amount it will lend to 90% loan-to-value (LTV).
The bank has allocated £1billion to a new range of mortgages which are available to buyers with a deposit as low as 10%. For these customers, HSBC is offering a market leading rate of 4.99%, fixed for two years.
First-time buyers, and other buyers with small deposits, have been largely excluded from the mortgage market for the last few months. At the beginning of this year, most lenders were only offering their best deals to people with deposits of at least 40%.
These new mortgages are available to HSBC Plus account and Premier customers – those who do not currently fit this criteria are invited to open a Plus account (a packaged current account costing £12.95 a month) to take advantage of the offers.
Joe Garner, group general manager of HSBC’s personal financial services, believes that this move shows customers that the bank appreciates their loyalty.
He said: “Although house prices have fallen, and continue to fall, they won’t fall forever. These changes mean we can continue to give customers the best possible deal on their mortgage.”
Chris Eagle, commercial manager at CreditChoices.co.uk, welcomes the move by HSBC and hopes that other lenders will follow in its footsteps.
He said: “A 10% deposit is an achievable target for first-time buyers and it’s great that these borrowers now have the chance to secure a good value deal. Hopefully this move will increase competition in the higher LTV market.”
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