Mortgages Uncovered

It may seem a little ridiculous for a bank to quote their rivals’ mortgage rates to their own customers even if they are lower than their own, however, HSBC are doing exactly this. The first step has been taken with HSBC customers at the bank’s Market Hill branch within Cambridge as they are the first to be given the option of HSBC’s own mortgages or those of their competitors.

The first step of the trial is to be extended to a further 19 branches over the course of the next few weeks and should the trial prove successful it is to go national in November 2009.

It is clear why HSBC have decided to do this. Whilst it is Britain’s sixth biggest lender, over two thirds of borrowers will choose to get their mortgage via independent mortgage advisers due to them getting the best deals across the market.

HSBC have linked up with mortgage brokers John Charcol to bring a service that charge each customer £150 for the privilege - a clever move. Should a customer decide to go with an HSBC mortgage, then the bank stand to make its normal profits from the sale. Should a customer arrange their mortgage with a “Mortgage Matcher” consultant, who will be a John Charcol employee then the bank will earn a referral fee plus their customer’s advisory fee.

Some people have a different view of the move that HSBC have decided to make and London mortgage adviser Peter O’Donovan said: “…hopefully HSBC’s customers will see that seeking advice from advisers to compare the whole market is common sense, as the lowest rate is not always best advice.”

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