Could HSBC help you with its Rate Matcher mortgage?

In a recent report the Financial Services Authority estimated that around 1.4 million homeowners were set to face soaring repayments as a result of their cheap fixed rate mortgages coming to an end over the course of this year. This is an issue that has been raising concern for some months, with officials believing that the sudden interest rate rise and the rise in repayments could lead to an increasing number of homeowners unable to meet their mortgage repayments, which would in turn lead to more people facing repossession over the course of the year.

In fact, the matter has become such a concern that the Council of Mortgage Lenders and the Money Advice Trust Charity have been working on putting together advice for homeowners that find themselves facing this type of problem.

An official from the Council of Mortgage Lenders recently stated: “A large number of borrowers are likely to see their mortgage costs rise when their fixed-rate deals expire this year. We may be past the peak of the ‘payment shock’ this will produce, but market conditions remain uncertain and borrowing costs are continuing to rise. Borrowers need to plan ahead for higher monthly payments and look carefully at the options available to them. Anyone who thinks they might have a problem in paying their mortgage should talk to their lender as soon as possible. The earlier the borrower makes the lender aware of any potential payment problem, the wider the range of options for dealing with it.”

However, there appeared to be a ray of light amidst all of the doom and gloom when HSBC recently announced that it was prepared to help casualties of the mortgage rate rises with its recently launched Rate Matcher mortgage. This product promised to match the interest rate of all qualifying homeowners to a lower limit of 4.54%, which means that many of those due to come off cheap fixed rates could remortgage to the same rate with HSBC. The offer has been extended to both HSBC customers and those that have mortgages with other banks. However, there are some points to bear in mind before getting too excited.

Firstly, the offer has only been opened for a matter of weeks, so consumers that are interested will need to act quickly. The bank is also asking for a 20% minimum deposit in order to qualify, so homeowners will have to be prepared to put down a large deposit. In addition to this there are also arrangement fees that will be charged, which consumers should consider, as these could bump up the cost of remortgaging considerably.

However, despite these issues many have welcomed the move by HSBC. One industry official said: ‘HSBC has thrown a lifeline to hard-pressed mortgage borrowers today with the offer of matching anyone’s fixed rate deal for another two years. You will need to have a 20% deposit and if you were lucky enough to secure a rate below 4.54% previously you won’t qualify. And the £999 fee might put some people off, particularly when cash is already tight. But the average fixed rate mortgage deal is currently around 6.2% and there are very few deals below 5%. So HSBC is in a

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