HSBC removes mortgage fees in promotion

In a reflection of the UK’s increasingly competitive mortgage market, high street bank HSBC has announced that it will axe all mortgage fees for two months, effective immediately.

The bank said that it was making the move as a reaction to the ongoing Financial Standards Authority (FSA) investigation into the charges.

Consumer groups have complained to the FSA that charges such as exit fees have been ramped up in recent years , while not costing providers any extra money over that period.

Head of mortgages at the bank Rob Chesters said: “With some lenders recently bowing to pressure to scrap their exit fees, HSBC has decided to stay one step ahead by removing all fees on its standard mortgage range until the end of September.”

Some advisers say, however, that the promotion might not be all that it seems. “With HSBC’s rates higher than many rivals, homeowners could be better off choosing to pay fees and head elsewhere”, This Is Money counsels.

The FSA is due to report its findings later in the year.

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HSBC reveals extent of charge costs

HSBC reveals extent of charge costs

In another twist to the ongoing dispute between consumer groups and British banks over allegedly “unfair” charges such as overdraft fines, a leading high street bank has revealed for the first time the financial damage it has sustained over the issue.

The figures, released yesterday by HSBC, show that more than £100 million has been paid back, reflecting the scale of customer rebellion against the charges.

HSBC chief executive Michael Geoghegan said that “the size of the refunds that we have made demonstrate our commitment to treating our customers in a fair and transparent manner.”

Last week, the Office of Fair Trading (OFT) officially launched legal action against eight UK banks.

Mr Geoghegan also welcomed this news, which he said would “achieve legal clarity and a resolution for our customers and our business”.

The banks were granted a temporary reprieve as the Financial Services Authority (FSA) agreed to waive all charges until the conclusion of the case, which will come later in the year.

HSBC has recently announced an 11 per cent rise in profits so far in 2007 compared with the same period in the year before, totalling around £7 billion.

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