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HSBC launches lowest ever five-year fixed rate mortgage

HSBC has today announced the launch of the lowest ever five-year fixed rate mortgage.

The bank has confirmed that borrowers with a 40 per cent deposit or equity will now qualify for a fixed rate of 2.99 per cent for five years.

HSBC head of mortgages Peter Dockar says “Every borrower has different needs from their mortgage. We recognise that many are looking for certainty with their mortgage payments over the longer term and have launched these products to meet that demand.”

“This is the lowest ever five year fixed rate to come to the market and with the security of our retail deposit funding we are committed to offering competitive rates to benefit our customers with what is for many, their largest monthly commitment.”

HSBC is also offering a seven-year fixed rate mortgage at 3.99 per cent. Both products come with a £1,499 booking fee.

HSBC has also launched; a 60 per cent LTV 2.49 per cent two Year discount (1.45 per cent discount off HSBC SVR) with a £499 fee, a 60 per cent LTV 2.99 per cent fee-free lifetime tracker (2.49 per cent above BoE BR); a 90 per cent LTV 3.84 per cent fee-free two year discount (0.10 per cent discount off HSBC SVR); and a 90 per cent LTV 4.79 per cent lifetime tracker (4.29 per cent above BoE BR) with a £999 fee.

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  • Phil 18th July 2012 at 12:56 pm

    Chris, I agree entirely that it is very tough out there and getting tougher but we have two choices mate, keep battling or get out. A lot of advisers I know are now part time using mortgages to supplement their new job. It’s a shame but life is not fair and maybe the public will only realise how good the broker community was once it is no longer there.

  • Chris Gardner 18th July 2012 at 9:54 am

    Phil | 17 Jul 2012 1:34 pm

    Points taken but the numbers of customers prepared to pay a premium for personal service is in sharp decline in most sectors. Generation X, aka the Facebook generation dont even want to speak to a person on the phone let alone in the home.

    As comparison websites become more sophisticated it will get even worse. I am told that experian are close to launching a platform bolt on to their highly successful credit expert service that will DIP you online with any lender subscribing to the service.

  • Phil 17th July 2012 at 1:34 pm

    Chris, if every client took the best rate available then there would not be any need for any of the other products on the market. I get what you are saying but we have already had a client back from being declined on this rate where we can place him elsewhere. He now has the best rate for his circumstances as the best rate lender wont lend to him. I agree that we all try to offer the best rates we can but sadly in the real world brokers are sometimes not the cheapest route. If all clients bought on price then most lenders would never do any direct busienss. Clients buy a package and that does include me being open at 8pm. I tell them there are cheaper deals direct but they still choose to use me.

  • bobby 17th July 2012 at 9:39 am

    Chris

    I agree. The only thing the client wants and rightly so is the best, cheapest deal for their circumstances. Any broker not doing this is actually stitching their clients up.

    It like expecting a client to pay £ 2000 more for the same Car as they ” like ” the salesman.

  • Chris Gardner 16th July 2012 at 4:56 pm

    Phil | 16 Jul 2012 12:52 pm

    No, phil you said in your own words “we dont only sell on rate” to Bobby.

    selling on rate is the ONLY thing the punter wants and expects you to do. The cheapest rate for their personal circs.

    i am not arguing over your choice of words, i am merely pointing out the its easy to play down the gravity of this deal, but it will hoover up most of the decent business out there. Sure some will come back to you after delays or rejection, but how many will then not be prepared to pay the extra to go elsewhere?

    Also, HSBC have been hiring. Big time. Service catch-up is only a matter of time.

    I hate to say this, but i cant see a sustainable future for brokers. Thats not good for choice or consumers – but as i see it the market is fragmenting – the ultra-clean HSBC/First Direct ING etc etc elite borrower and a new class of “off-prime” or “working class prime” borrowers who at present are being served by brokers. In time, another lender will choose to take that market too.

  • Phil 16th July 2012 at 12:52 pm

    Chris, only if they qualify mate. I have had loads of people come back from HSBC who dont qualify when there is nothing wrong with them and they are then happy to pay a bit more.

  • Chris Gardner 13th July 2012 at 4:48 pm

    Phil | 13 Jul 2012 10:34 am

    Thats absolute rubbish Phil. ALL a customer wants is the cheapest rate for their circs. The ONLY criteria is price. ie if you want a 5 year fix, i’ll take the cheapest please, if i want 2 year tracker, i will take the cheapest please.

  • Luke Atkinson 13th July 2012 at 1:31 pm

    Bobby, I know someone who is looking for a motivational coach at the moment, if you are serious about leaving the industry?

  • Shaks 13th July 2012 at 1:05 pm

    Just ignore this HSBC hype. Only 18% of applicants actually proceed to offer because the underwriting is so draconian. Many of our clients have gone direct only to come back with their tail between their legs. We’re not worried at all. Good quality clients will always want advice. These low rate announcements by direct lenders are a bonus for us because it prompts a flurry of calls to the office, which in turn enables us to offer ADVICE. So thanks to HSBC for free marketing assistance as I’ve already got 3 new clients due to the millions they have spent on promoting this ‘impossible to get’ mortgage. My phone is ringing, must go.

  • Ketan Yadav - Avenue & Co Private Finance 13th July 2012 at 11:59 am

    This is no doubt one phenomenal deal – IF YOU CAN GET IT!

    However, HSBC will be inundated with applications and oversubscribed and as usual – will decline a fair few. Risk your £1499 upfront fee – it could pay off or a hefty fee to lose as well if you get downvalued.

    Other lenders need to follow suit – HSBC have always had market leading rates for the best clients with good income and large deposit/equity.

  • Dazed & Confused 13th July 2012 at 11:22 am

    Strangely enough, I am not overly worried about this. Yes, a blistering headline rate, and yes, no doubt we will see one or two clients drift over to them, BUT those that get turned down are going to be really miffed with HSBC. I have had a couple of clients in recent weeks come running back with their tails between their legs after having been turned aside by HSBC…and that was from their normal rates!

    Lets be honest, this is going to cripple HSBC’s mortgage operation…floods of cases going absolutely nowhere! Probably the best thing they have ever done to HELP the intermediary maret place!

  • R WATSON 13th July 2012 at 10:56 am

    HSBC lays down the gauntlet yet again!!!Come on…….the rest of the banks have to start to compete again otherwise we have no chance.

  • Dan McGeehan 13th July 2012 at 10:54 am

    Good headline rate however how many clients will pay £1499 upfront to secure the rate. Added to that it will take 3-4 weeks to get an appointment with HSBC in some branches to discuss this. If they cannot do an electronic valuation they will charge for one and there will also be legal costs. So yes at the End of the day it will make good headlines but it will not fit many clients idea of a good 5 year fixed rate.

  • CJ 13th July 2012 at 10:42 am

    Lets be fair, Bobby is always the most negative of people on this site and months ago was threatening to leave the broking world but is still here… if you want to succeed you need a change of attitude and behaviour….

  • Colin Payne 13th July 2012 at 10:35 am

    Have you heard that HSBC don’t accept all mortgage applications?!?!?

  • Phil 13th July 2012 at 10:34 am

    come on bobby we don’t just sell on rate do we? If so we should have all stopped tarding years ago. I have had many clients come back to me after talking to HSBC and other lenders offering better direct deals. Although i do agree if HSBC can do such great rates then surely intermediary lenders can get a lot closer to this.

  • Brendan Carlin 13th July 2012 at 10:31 am

    Dont worry about this deal. I have had quite a few good quality clients declined by the HSBC becuase they didnt fit the criteria and then had to come back to me to get a real mortgage. They will do business to some individuals but you dont give rates like this for the mass mortgage market

  • Douglas Shillinglaw 13th July 2012 at 10:25 am

    If HSBC have the funding to offer such low interest rate products, what are all the other lenders (especially the ones owned by the government) going to do about competing with HSBC or are they keeping their rates high as the expense of the public to pay their fines for mis-managing LIBOR rates& mis-selling PPI. Brokers are importan t in providing advice to the public but this seems to be another ‘slap in the face’ to us especially as there seems to a lot of direct only products which have lower interest rates than the products lenders offer via brokers especially as higher LTV’s

  • bobby 13th July 2012 at 9:42 am

    Why would they come back to us if our best rate for 5 years is nearly 1% higher ?

  • Colin Payne 13th July 2012 at 9:36 am

    Incredible pricing and well done HSBC, however they will get inundated with enquiries and applications, will have to separate the wheat from the chaff so one thing will be sure to suffer, service, which is where brokers excel. Stay in touch with these clients and some will coming running back or even consider a simultaneous application with someone else…

  • bobby 13th July 2012 at 9:31 am

    That is insane ! Every single person with 40% equity and no ties, or even with ties should re mortgage to this. The only problem is a mortgage broker can’t access it for his clients. Another death of a thousand knives. Someone please just put us out of our misery now. You wouldn’t do this to a Dog !

  • Graham Kennedy 13th July 2012 at 8:57 am

    Come on you intermediary lenders give us intermediaries something to compete with this!