Can HSBC help kick-start the UK housing market?
Finally, some good news for first time buyers – HSBC Bank have announced plans to offer 90% mortgages, helping buyers get back on the ladder without a debilitating high deposit being required. The Bank will make £350million available to borrowers with smaller deposits in an effort to kick start the UK housing market back into life, specifically reserving £250million of it for first time buyers until the end of 2011.
The mortgage products on offer vary from two-year fixed-rate loans at a rate of 4.49%, five-year fixed-rate loans at 4.89% and a new lifetime tracker at 4.09% above base rate. The offers are even better for those who do have deposits with a 15% deposit bringing a two-year fixed-rate loan at 4.29%, five-year fixed-rate loans at 4.69% and a new lifetime tracker at 3.49% above base rate.
To make them even more appealing, HSBC are offering these mortgages without fees. The fee-free mortgages have a maximum loan to value of 90% and while there are other products out there for people with a 10% deposit that may come with slightly lower rates, they almost always have a fee attached.
Figures released this week by the Council of Mortgage Lenders indicated that the situation is starting to improve already, with loans approved for first time buyers up 5% in August 2011 from August 2010, and also up 5% from July 2011.
Mortgage products with a higher LTV are starting to appear in other places as well, including Yorkshire Building Society and Northern Rock. Figures from Moneyfacts, the independent financial data provider, showed that there are now approximately 268 mortgage products at 10% LYV available, up from just 199 at the start of this yeat. That a Bank of HSBC’s stature is joining this trend can only be a good thing for the frustrated first time buyers who have been unable to join the property ladder over the past couple of years.
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