Thanks to a lower arrangement fee and a 1.95 per cent discount, HSBC’s new mortgage offer appears to be a market leader and will be open to the market from Monday.
The lender’s current standard variable rate (SVR) is currently set at 3.94 per cent, and with the 1.95 per cent discount this means borrowers would be paying just 1.99 per cent. The arrangement fee is just £999. The mortgage is only available to those who need just 60 per cent or less of a property’s value though.
According to a representative from London & Country, the mortgage broker, this mortgage beats those with a lower interest rate across the two year discounting period thanks to its lower arrangement fee.
When it comes to taking out a mortgage, any mortgage advisor would advise to take into account the arrangement fee when working out the total cost of a mortgage. A lower interest rate may sound attractive but when you then add in the arrangement fee that you pay up front or add to the loan as many do it can then work out more expensive.
Those doing their CeMAP training will see this in practice during their CeMAP course and learn how arrangement fees and other fees impact on a mortgage.
Delegates also learn about different mortgage types, so for instance, with a discounted mortgage such as this one a borrower is subject to increases in the SVR where their interest rate would rise in line with it.
