What to make of news that HSBC, the UK’s biggest bank, is offering new customers a mortgage matching deal from Monday 14 April, which will match expiring fixed-rate deals for another two years?
Other banks are bolting and nailing shut closing their doors to business and putting their mortgage rates up. Have the senior bods at HSBC not been reading the newspapers recently, which only yesterday went crazy over a drop of 2.5% in house prices?
Quite the opposite. HSBC has suffered a little at the hands of sub-prime in the US, but it’s lightly exposed to UK housing, with just a 3% share of the mortgage market. That’s way out of line with its status as our biggest bank and FTSE 100 heavyweight.
HSBC is incredibly well-funded, too. Thanks to legions of diligent Far Eastern savers, it has no need to access the wholesale funding market that’s shut down due to the credit crunch, and which ultimately did for Northern Rock.
HSBC wants the best new mortgage customers
I don’t believe HSBC wants to expand its exposure to Britain’s wobbly housing market too much, however. Rather, it’s using its strength to cherry pick the new best customers, as well as cannily benefiting from free publicity due to its apparent contrariness.
The small print excludes all but the best customers:
- A 20% deposit is required to qualify for the new deal
- You’ll need to pay a hefty fee
- The maximum loan is £250,000
- According to the BBC’s Working Lunch, you’ll also need to open a current account with HSBC
The deal does look very attractive if you do qualify; the lowest rate it will match is 4.54%, which is extremely competitive in the current climate.
HSBC says the deal will only be available for five weeks from Monday, so keep an eye on the HSBC website if you’re interested.
