HSBC is extending its offer to match homeowners’ existing mortgage deals for a further six weeks.
The move will be a lifeline for some homeowners as many lenders continue to restrict their best offers to those with deposits of at least 25 per cent and raise rates for fixed, tracker and standard variable mortgages.
The bank first introduced a fixed rate matching scheme five weeks ago, exclusively for existing borrowers with loan-to-values of 80 per cent. The bank said it had been a huge success, with mortgage sales rising four times above normal levels and now averaged more than £100m daily.
No other banks have followed suit, leaving them vulnerable to losing customers to HSBC. The bank says it has been able to offer the service because it does not borrow from the money markets for mortgages.
Elsewhere in the mortgage market, the average rate for a two-year loan has hit 6.64 per cent, up from 4.34 per cent two years ago, so that someone coming to the end of a mortgage taken out on a £150,000 house in 2005 will see their average repayments jump by £206 a month to £1,025, according to a report in the Daily Telegraph.
A homeowner with a typical five-year deal in 2003 on a £250,000 home loan will have to shell out almost £500 more if they are re-mortgaging now.
First time buyers are also having to find larger deposits in order to secure the best rates and all re-mortgagers are facing higher arrangement fees.
Around 1.4 million homeowners are expected to come to the end of fixed rate deals this year, many of them from Northern Rock who will have to find a new lender.
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