From next Monday (6 October) HSBC will offer its mortgages through a broker, initially in partnership with Countrywide Mortgage Services.
Each application will be underwritten by HSBC to ensure the borrower’s individual circumstances are fully considered, providing mortgages up to a maximum of 80 per cent loan-to-value through Countrywide.
Speaking to FTAdviser, Jonathan Byrne, head of assets and retail banking at HSBC, said that as the Mortgage Market Review reshaped the regulatory environment, the bank was presented with time to reconsider using the broker channel.
“As a bank we’ve been increasing out investment in distribution channels recently, as through both tracking data and talking to customers, we’ve found that people are using intermediaries more and more.”
HSBC has been working with Countrywide on the tie-up for several months and Mr Byrne added that this will be the first phase in a permanent move into the broker market, with plans to work with more intermediaries in time.
Nigel Stockton, financial services director at Countrywide, said: “We are in no doubt that we will prove Countrywide can provide HSBC with more clients for their market leading products and we look forward to working together.”
Initially HSBC will offer 60 and 70 per cent LTV mortgages - eventually increasing to 80 per cent - including buy-to-let mortgages. The range includes a 1.49 per cent 2-year fixed rate; a 2.99 per cent 5-year fix and a 1.99 per cent lifetime tracker with no early repayment fees and the option to make monthly overpayments.
Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, commented: “As both parties have said this is an important step forward in the development of the mortgage market post the financial crisis and the deployment of the Mortgage Market Review.
“Whist this is a small and tentative step, I am delighted with the commitment from both parties to expand on this. I have no doubt that as HSBC develops it systems it will look to increase distribution through a wider range of partners.”
Rob Clifford, commercial director of Shepherd Direct Group, added that one of the group’s businesses helped HSBC Group pilot intermediary lending in the early nineties, through the First Direct brand.
“So although it’s been a long-time coming we’re very pleased to see HSBC recognising the importance of the intermediary market and the value that consumers see in getting impartial mortgage advice.
“Committing to intermediate is a good move for HSBC and enhances consumer choice, which the regulator should also welcome.”
