Household HSBC Watch

Traditional lenders typically offer lower rates than competitors to snare customers. In contrast, subprime lenders base rates on credit scores, so what is a ‘’fair” rate can be difficult to gauge. Subprime borrowers’ credit scores typically fall below 620, on a scale of 350 to 850. To compensate for taking on these riskier customers, a subprime lender might charge one customer 7.5 percent for a 30-year fixed loan, while charging a customer with a lower score 8.5 percent. Conventional mortgage rates are currently 5.7 percent.

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