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HSBC offers to match your fixed rate deal

Which? advises homeowners to get a quote

HSBC bucked the squeeze in the mortgage market today by offering to match homeowners’ existing fixed-rate deals.

The move comes at a time when many borrowers are finding they cannot find a home loan because banks are reining in lending during the current credit crisis.

HSBC, which has 3% of the market, will look to match homeowners’ existing fixed-rate deals – including rates as low as 4.54% – for a further two years.

Offer starts Monday

The offer, which starts on Monday for a limited period, is subject to restrictions and a fee, while borrowing will be limited to 80% of the value of the property. In line with all HSBC’s mortgages, the product will not be available through brokers.

The lender, which funds the vast majority of its mortgages through retail deposits, is said to be gearing up to cope with three times its current level of business.

Joe Garner, HSBC’s head of UK personal financial services, said: ‘We’re in an incredibly strong position while others are stepping back. We remain competitive and are selective about the right sort of business.’

Funding surplus

Collins Stewart analyst Alex Potter said HSBC’s deals could be two percentage points below its peers.

He added: ‘HSBC has a surplus of funding, predominantly due to its Far-Eastern businesses which are extremely liquid, but also due to its relatively modest market share in UK mortgages.

‘HSBC does not have to use currently expensive wholesale funding and is clearly now set to aggressively deploy its strong deposit-gathering franchise.’


Mr Potter said a loan-to-value ratio of 80% meant HSBC was unlikely to change its normally risk-averse outlook.

However, he said the offer would put some momentum behind its UK mortgage business and improve its longer-term market position.

‘Banks without such funding benefits and with large refinancing events due this year are likely to be market share losers due to this move. The prime candidates for share loss should be Halifax Bank of Scotland, Alliance & Leicester as well as Nationwide and Northern Rock, for example.’


The size of the fee will depend on the interest rate and size of loan requested, but HSBC said it estimated almost three-quarters of customers will pay a fee of £999 or less.

Which? Money Editor Martyn Hocking said: ‘This deal sounds like great value and anyone with at least 20 per cent equity who is coming towards the end of a fixed rate deal should get a quote from HSBC. 

‘Don’t automatically switch, though – take the quote back to your current lender and see if they would be willing to match it to keep your business. Staying with your current lender can mean you avoid fees – the HSBC fee of £999 is high by historical standards, though it is not excessive in the current market.’

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