At a time when many mortgage lenders are withdrawing deals – most notably 100 per cent home loans – HSBC appears to have timed the launch of its Rate Matcher mortgage extremely well. The deal, which has been available to existing customers since February, offers to match the rate of non-HSBC customers who are coming to the end of their fixed-rate deal for a two-year period.

However, the deal may not be as perfect as it initially seems according to Katie Tucker from mortgage expert John Charcol. Homeowners must have a loan-to-value of 80 per cent or less to qualify for the HSBC Rate Matcher Mortgage and will have to pay a variable fee of up to £5,000, dependent on the loan size and interest rate agreed.

“Very generically, I think this offers a ray of hope for a lot of borrowers looking to avoid a major hike when their deals comes to an end,” says Ms Tucker. However, she adds that it really depends how high a fee prospective customers are prepared to pay. She also points out that plenty of lenders already offer low rates with a substantial fee.

And, although reports suggest the deal will prompt a massive response from consumers and may prove fatal for other mortgage providers, Ms Tucker believes the HSBC Rate Matcher will have a limited impact on the mortgage market as it is only available for a five-week period from April 14. She also claims it could generate interest for other lenders and that it is good news overall “in terms of market interest and market confidence”.

Ms Tucker adds that the biggest winner in this situation is HSBC itself, as the deal is offered to low-risk borrowers only; the most attractive type of customer for the bank to lure in. She advises homeowners to contact the bank when the deal becomes available to obtain a fee calculation and then to contact an independent broker to discuss all the options available to them.

This was echoed by David Doulton, director at Fairinvestment.co.uk, who urges borrowers tempted by the HSBC deal to do their own calculations first, taking into account the potentially high fees as well as the low rates before making any decisions.

“Although the HSBC Rate Matcher could be a very good deal for some people, the high arrangement fee could negate the attractive rates and the 20 per cent deposit prices many people out of the offer,” he said, “so if you are looking for a new mortgage deal, it still worth shopping around. Do your own research and approach an independent mortgage broker for advice.”

© Fair Investment Company Ltd