You might remember that HSBC pledged its New Year’s resolution for 2009 was to double the volume of lending it had back in 2007 and it seems that one way it intends to do this is to offer its lowest ever mortgage interest rate at just 2.99 per cent.
However, as you might imagine, there is a catch. The new mortgage interest rate is only available to its most wealthy of customers, i.e. its Premier customers. To be an HSBC Premier customer you must have a minimum of £50,000 in savings or investments with the bank or alternatively a mortgage of over £250,000 plus a salary of at least £75,000 – certainly not an easy task for most people and a requirement that rules out many.
But that’s not all. No, you must also have a minimum deposit of 40 per cent and pay an arrangement fee of £999.
As Melanie Bien of Savills Private Finance, the mortgage broker, told The Times newspaper:
“This is a very attractive low rate of interest but there are two main problems with this particular mortgage. The first is that borrowers must open a Premier current account with HSBC to qualify – and most people don’t want the hassle of moving their current account with all its direct debits and standing orders. The second problem is that as it is a discounted-variable rate it is connected to the lender’s standard variable rate, which is set at the lender’s discretion. In this instance it is low but that is not true of every lender; in most instances, borrowers tend to be better off with trackers (with no collars) which have to follow movements in base rate so tend to be far more transparent.”