08 April 2009 / by Rachael Stiles
HSBC has allocated £1billion of new mortgage funding to provide up to 90 per cent LTV (loan-to-value) mortgages with interest rates from 4.99 per cent.
The new home loans are part of a £15billion fund for HSBC mortgage lending in 2009, twice as much as it lent in 2007, to reflect “the bank’s commitment to continue lending to UK homeowners at competitive rates,” it said in a statement.
The mortgage market has been a hostile environment in the last year, as lending has dried up and criteria has become stricter, effectively freezing out first time buyers and those with small amounts of equity in their home.
Since the Bank of England’s interest rate cutting campaign, which saw the base rate fall from five per cent in September to 0.5 per cent in March, the cost of mortgages has fallen slightly, but those without significant deposits have been unable to take advantage of the new mortgages becoming available.
Often, the best and most affordable mortgage deals have only been available to buyers with a deposit of 20 or 40 per cent, looking to borrow a low LTV mortgage.
First time buyers have shown enthusiasm for re-entering the market in recent months, a different picture to that which was seen 12 months ago when mortgage rates were still high, but they have not had the funding made available to them.
HSBC says that it is trying to rectify this situation by offering fixed rate mortgages of up to 90 per cent of the value of the property, and with rates from 4.99 per cent, fixed for two years.
Joe Garner, group general manager of HSBC’s personal financial services said: “Although house prices have fallen, and continue to fall, they won’t fall forever. At HSBC we are standing by our customers through thick and thin and these changes mean we can continue to give customers the best possible deal on their mortgage. This is a one billion pound commitment and it says we appreciate our customers’ loyalty.”
The new HSBC mortgage range will be available from April 14 to customers of the HSBC Plus account or Premier customers.
Compare mortgage quotes and see if the new range of HSBC mortgages are right for you…
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