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HSBC's Rate Matcher mortgage appeals to UK consumers, says

28 April 2008 / by Joy Tibbs
The results of a poll show that the launch of the new HSBC Rate Match mortgage has been generally well received by UK consumers.

When asked what they think of the new mortgage deal, more than a quarter (26 per cent) of respondents said they would apply for the deal.

The HSBC Rate Matcher Mortgage is available to customers whose fixed-rate mortgage deal is due to end before June 30. Although the deal has been in place for HSBC customers since February, the decision to extend the offer to non-existing customers has caused quite a stir.

Non-existing customers can now take out an HSBC Rate Matcher mortgage for a two-year fixed-rate period. However, certain conditions are attached, for example, applicants must have a loan-to-value of 80 per cent or less to qualify and the deal involves a fee of up to £5,000.

Director at, David Doulton, says: "The HSBC Rate Matcher mortgage appears to be a really attractive deal for consumers. Many mortgage lenders have withdrawn deals or raised prices, so matching their current deal could offer homeowners a ray of hope."

However, while the largest group of respondents said they thought the deal was "great" and would apply, 24 per cent said that the fee makes the Rate Matcher less competitive than it might first appear. And a relatively high number – 18 per cent – saw the mortgage deal as a pure publicity stunt.

Despite this, while six per cent claimed the 20 per cent deposit makes the deal an unrealistic one for homeowners, 14 per cent believed the launch could be good news for the mortgage market overall as it may inspire other lenders to offer similar deals.

Five per cent commented that the application timeframe – which runs for five weeks from April 14 – is too limiting, while just one per cent said they would never take out a fixed-rate deal.

"Many people will find themselves unable to apply for the HSBC deal if they do not have a deposit of 20 per cent, and high fees could make the offer far less competitive than it originally sounds," continues Mr Doulton,

"Anyone looking for a new mortgage deal – whether first-time buyers or existing homeowners – should consider all the available options rather than opting for the first deal that jumps out at them. Although the rate is important, other factors, such as the arrangement fee, should not be overlooked."