HSBCApr 4 2018

HSBC launches 95 per cent LTV mortgage via broker partners

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HSBC launches 95 per cent LTV mortgage via broker partners

HSBC UK is introducing a range of 95 per cent loan-to-value (LTV) mortgages, which will be available initially through its broker partners.

The loans have no booking fee and provide a choice of two, three or five-year fixed rates.

The lender said the products would be “particularly helpful” for first-time buyers (FTBs) looking to get on to the property ladder.

Product features include interest rates starting from 3.49 per cent for a two-year fixed rate, no product fee, free valuations, mortgage available up to a maximum £400,000 and a maximum term of 30 years.

While 95 per cent LTV mortgages are primarily aimed at attracting FTBs, the mortgage range is also available to homeowners wishing to move house.

The lender said it had been steadily growing the number of broker partners it works with since entering the market two years ago.

HSBC’s latest intake includes Andrews Estate Agents, Private Finance, JLM Mortgage Services and John Charcol, taking the total of broker partners to 27.

The lender has also moved its partners on to its new broker platform, Omiga, which streamlines the mortgage process for customers.

HSBC explained the Omiga platform had given it the opportunity to make its new 95 per cent LTV mortgage range available through brokers. The bank plans to also make the mortgage range available through the branch network, over the phone and online during the summer.

HSBC is the latest in a raft of lenders who have recently increased their LTV limits to 95 per cent. Others include Sainsbury’s, Newcastle Intermediaries and Coventry for Intermediaries.

Provider view

Tracie Pearce, HSBC UK’s head of retail products said: “Much has been publicised about the difficulty first-time buyers [FTBs] face breaking into the housing market, particularly in London and the south-east. 

“Nevertheless, there is still a really strong desire for home ownership, with as many as 59 per cent of FTBs recently telling us they would be open to the idea of buying with someone they do not know.

“But with only a 5 per cent deposit required for our new range of mortgages, no booking fees, free standard valuations, and stamp duty exemption up to £300,000, we hope to help FTBs get a footing in the market with very little initial outlay. 

“And with historically low interest rates, monthly payments can end up being less than rent in some cases.

“The vast majority of prospective FTBs prefer having a helping hand through the home-buying process, so we are pleased to initially make our 95 per cent loan-to-value [LTV] mortgages available through our broker partners.” 

Adviser view

Daniel Bailey, mortgage broker at Middleton Finance, said: “Lenders increasing their LTV to 95 per cent through brokers is quite a new thing. I am seeing more and more lenders commit themselves to 95 per cent [LTV] in the market, which is great for clients. 

“Affordability is okay for a lot of clients, but the deposit is still the big issue, so it is positive that HSBC has decided to move into that area.”

Charges

No product fee.

Verdict

Despite the government’s attempt to stimulate the FTB market by abolishing stamp duty on properties worth less than £300,000, being able to afford a deposit has proved a barrier to some borrowers. This move by HSBC will therefore be welcomed by advisers and their customers.