Good news for HSBC mortgage customers

Much press attention has been given over recent months to the predicted remortgage repayment shocks for homeowners due to complete their cheap fixed-rate interest mortgage deals. The average consumer approaching the end of their introductory period is expected to feel increased pressure on their finances due to the interest rate rises of the past 18 months; despite December’s drop, interest rates are still such that anyone in this position is in for a bumpy ride as they search for an affordable option.

HSBC mortgage customers in this position may feel a little brighter about their prospects as of today, with HSBC’s introduction of their ‘RateMatcher’ deal. Homeowners approaching the end of their fixed rate interest deals will now be able to extend their two, three, or five year fixed rate mortgages for a period of one, two, three or five years at the same rate of interest they are currently paying. With some existing HSBC fixed interest rates as low as 4.6%, this offer will be an attractive prospect for many customers, and makes an interesting and competitive addition to high street mortgage products. Fees on the deal will depend on loan size and length of deal, but are expected to be low – around the £500 for most customers, which makes this a competitive offer when compared with the expense of remortgaging with another lender once exit fees, valuation and legal costs are considered.

For those seeking a new mortgage, fixed rate options are currently offering good value, a situation that is expected to continue over the coming months. Even though interest rates are expected to fall again during February, and are predicted to reach 4.75% by the year’s end, fixed rate deals should not be ignored by mortgage hunters. It may seem to make sense on the surface to avoid fixed rate deals when interest rates are predicted to drop, but in such a situation many banks increase their tracker and variable products in anticipation. In fact, according to research by moneyfacts.co.uk, 10 UK mortgage lenders have increased their tracker mortgage product margins by as much as 0.45% in the last two weeks, while fixed rate products are dropping.

As a result, mortgage-hunters should snap up a tracker deal before they lose their shine completely, or consider the fixed-rate market carefully. Differences such as the size of the loan you are after and the size of your deposit can make a big difference to the options available. A couple of the best include Norwich and Peterborough Building Society’s 1 year fixed rate product: 4.99% fixed for 1 year, 10% deposit with a 3 year tie-in. Or, take a look at the Yorkshire Building Society fixed rate range, which includes a 4.89% fixed rate product until 31/03/10. Speak to an independent mortgage advisor for advice on these and other deals available.  Whatever type of mortgage you are searching for, be prepared to put down a substantial deposit of 10% or more in order to get the best rates available; due to the credit crunch, lenders are tightening their lending criteria across the board and are weeding out less desirable candidates by pulling their high LTV products.

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