HSBC, the bank that offered a “rescue” mortgage deal to help homeowners facing surging repayments, is hitting the same borrowers who take up the deal with arrangement fees of up to £9,999. It has emerged that after an increase last Wednesday in the fees charged for taking out the deal, the maximum fee for a customer applying for a 4.79 per cent deal on a £250,000 mortgage – the lowest possible rate that HSBC will match for borrowers who are not existing customers – rose by 50 per cent, from £5,000 to £7,699. For existing HSBC customers, who can take out bigger loans of up to £500,000, the maximum fee rises to £9,999.

As shortsighted HSBC looked for an excuse it seemed like the excuses as subprime popped its ugly head in the United States last year. HSBC blamed the increasing cost of mortgage funding for its decision to raise fees on the deal, after it had decided to extend the offer for a further six weeks. All the analysts couldn’t see six weeks down the road? A spokesman said: “We had to choose between pulling the deal, increasing fees or making a loss. We believe we made the right decision.” (As we write this article the British pound sterling buys 50 cents in US dollars.)

Popularity: 4% [?]

No related posts.