HSBC matches rivals’ fixed-rate mortgages

Mortgage customers concerned about rising interest rates can breathe a sigh of relief as HSBC is extending its mortgage Rate Matcher offer to all UK homeowners.

Non-HSBC customers will be able to apply for the deal, available for the next five weeks, promising to match rates as low as 4.54 per cent for another two years.

Under the deal, which was originally only available to existing HSBC customers, the maximum loan will be £250,000.

“Rate Matcher helps customers plan budgets over the medium term and eases the shock of seeking new borrowing when old rates expire,” commented head of mortgages at HSBC Martijn Van Der Heijden.

Customers will have to pay a fee which will depend on the interest rate and size of the loan requested, however the bank expects that 72 per cent of customers will not pay more than £999.

Many consumers may want to take advantage of this deal since the average fixed-rate mortgage deal is currently around 6.2 per cent, with very few deals below five per cent.

Tags: Business Finance, rivals, rising interest rates, investment, HSBC Martijn Van, mortgage rate, maximum, term

Tide turns on fixed rates, according to GMAC-RFC

Mortgage lender GMAC-RFC predicted a shift back towards customer preference for alternative mortgages such as tracker mortgage and discount deals in the coming year.

The provider claims that fixed-rate deals are “already priced high” in preparation for further interest rate increases, which might lead to customers to change to other options

Consumers are fearful of rising interest rates, meaning big rate hikes on variable mortgages.

Julie Gaskin, corporate relations manager at GMAC-RFC conceded that “in a rate-rising environment it often makes sense for borrowers to take out a fixed-rate deal”, but argued that “the tide is now turning, as [fixed-rate deals] are factoring in for one or more future rate rises, making tracker and discounted deals look increasingly attractive, and in many cases cheaper”.

“Now is the time for intermediaries to harness the change and look towards tracker and discounted products to drive business growth as demand for this type of product will inevitably increase in the foreseeable future. Those that shy away from this may be missing a trick with consumer hungry for a good deal”, she added.

Latest figures from the Council of Mortgage Lenders (CML) show around 75 per cent of new mortgage loans being fixed-rate deals.

Tags: tide, good deal, mortgage lender, demand, rising interest rates, rate deals, foreseeable future, mortgage lenders

Housing market slowing down

House prices in the UK are increasing in price at the slowest rate they have all year.

The Halifax House Price Index shows that properties increased in value by 0.3 per cent in May, signalling the third consecutive month of the market slowing down.

The average house price sits at a lofty £196,893 and buyer interest fell for the fifth consecutive month.

The housing market is expected to continue to slow down in the coming months, with increasing interest rates and reduced real earnings each playing a part.

Commenting on the 0.3 per cent price increase, Martin Ellis, chief economist at Halifax, cited rising interest rates as the main factor.

“This is the smallest increase so far this year and the third successive easing in the monthly growth rate,” he said.

“The recent slowing in monthly house price inflation, together with further evidence of moderation in housing market activity, suggests that the interest rate rises since last summer are having an impact on the market.”

A slowing down of the housing market is good news for first-time buyers as ever-increasing house prices are making it very difficult for young buyers to get onto the property ladder.

Tags: value, Subprime mortgage crisis, halifax, successive easing, rising interest rates, Index, part, United Kingdom

Brits losing faith in property

Many Brits are losing their faith in the property market as a way of investing.

That is according to the Standard Life Savings & Investment Index which shows that continually rising interest rates are denting people’s confidence.

Since October 2006 confidence in our homes as a savings vehicle has fallen by 19 per cent and Standard Life says that this is down to recent interest rate rises.

In response to the findings, the firm is calling upon all of us to ensure that we do not invest all of our money into a property without sufficient financial backup.

“With interest rate rises having such an immediate impact on investor confidence, I hope that investors will now consider spreading their investments across a wider range of investment categories and vehicles when planning for their financial futures,” said Trevor Matthews, chief executive of Standard Life Assurance.

The index also revealed that over half (51 per cent) of us are saving for a holiday, while retirement, home improvements and buying a car followed.

Tags: executive, market, rising interest rates, savings, Trevor Matthews, investments, October