HSBC mortgage rates matcher can be harmful to your finances says The Mortgage Warehouse

A comparison of available mortgage rates from the market as a whole by The Mortgage Warehouse, has revealed that the HSBC mortgage rates matcher is little more than a gimmick, and could mean you end up paying a higher overall cost compared to other mortgage products currently available from other mortgage lenders.

HSBC’s mortgage rate matcher offer is available to new customers who have come to the end of a fixed rate mortgage after 1 January 2008 or are due to do so by 30 June 2008. The offer is a 2 year fixed rate product that guarantees to match or better your existing fixed rate of 4.54% or above. The overall cost for comparison is 6.5% APR, but the actual rate available depends on your individual circumstances, with the lenders arrangement fee playing a big part in the overall cost of the mortgage.

Mortgage rates sourced by The Mortgage Warehouse indicated that  there are a significant number of mortgage rates available from other lenders with better overall costs for comparison of  6.0% APR.

“ The problem with this type of offer from HSBC,  is it suggests that a good deal can be had simply by matching your rate, whereas in reality a calculation of  overall cost  in comparison to all other mortgage rates  available in the market shows the offer to be more expensive in the long run” said Jerry Figueroa-Lee, Operations Director at The Mortgage Warehouse.

“In the current market we would recommend that anyone with a mortgage rate due to expire within the next six months, should talk to a mortgage adviser that deals with the whole of the market. This way you know that you are receiving advice on mortgage rates available from the whole market, and not just the one lender”

HSBC’s Rate Matcher – some details

• The Rate Matcher offer is available to new customers who have come to the end of a fixed rate mortgage after 1 January 2008 or are due to do so by 30 June 2008
• The HSBC Rate Matcher Offer is a 2-year fixed rate product and guarantees to match or better your existing fixed rate of 4.54% or above. The overall cost for comparison is 6.5% APR. The actual rate available will depend on your individual circumstances.
• The maximum loan size is £250,000 and up to a maximum of 80% Loan To Value (LTV)
• An up-front booking fee of between £599-£4999 will apply
• The booking fee will vary depending on your current interest rate, and the amount of your loan
• An Early Repayment Charge will apply during the fixed rate period
• Applications for the Rate Matcher offer must be submitted between 14 April and 18 May 2008
• Please note that your existing fixed rate product may be subject to an Early Repayment Charge and/or Exit Fees charged by your existing lender.
• Rate matcher is subject to credit status and HSBC reserve the right to decline your application if you are in arrears or have missed any mortgage payments.
• If your current fixed rate mortgage amount exceeds £250,000, then Rate Matcher will not apply. Similarly if the fee required to maintain the same rate exceeds £4,999, then HSBC are unable to offer you their rate matcher service.

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