Rate Matcher returns from HSBC
Earlier this month the High Street banking giant HSBC brought back one of its popular mortgage products, the Rate Matcher mortgage, which promised to match or beat a homeowner’s current rate and fix it for two, three, or five years.
The mortgage was launched last year for a limited period and proved popular amongst homeowners that wanted to try and reduce their outgoings and benefit from the stability of having the rate locked in for a period of time.
However, whilst the mortgage did prove popular last time around it has been met with controversy from some industry professionals, who feel that many customers are being ripped off by being charged fees as high as £4699 for the privilege of being able to sign up to this mortgage deal. This is the fee that would be charged to someone taking out the maximum loan amount of £250,000 at a rate of 2.49 percent, which is the lowest rate that HSBC is now offering on this mortgage.
One mortgage broker said that consumers should always ensure that they look around before signing up to this or any other deal, otherwise they could end up paying way over the odds on the fees charged for such mortgages.
He said: “Whilst the flexibility to select a rate will hold plenty of appeal, the trade off is that the lower the rate selected the bigger the fee. Borrowers should therefore be sure to hold up any Rate Matcher offer against deals in the open market.”
The mortgage also comes with only a 75 percent loan to value ratio, which could make many people ineligible.
One expert said: “For some borrowers this deal will represent a significantly lower rate than the SVR their current lender is offering. However, the maximum loan-to-value ratio of 75 per cent severely limits the deal’s audience and for those with the equity, a hefty up front fee is likely to prove quite a deterrent..”
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