The concept, already popular in countries including Australia, New Zealand and Canada, is designed to appeal to customers facing the dilemma of choosing between the flexibility of making overpayments and the security of locking into a fixed deal.
Although HSBC does not offer mortgages through brokers, inter-mediaries and comparison sites alike have welcomed the initiative and expressed hope that more lenders will follow suit.
Mike Fitzgerald, sales director of The Emba Group, said: “I would like to see more lenders bring offerings like this to the market, as a lot of borrowers are unsure whether to opt for a fixed rate or a tracker. A direct lender such as HSBC bringing out a product like this puts pressure on intermediary lenders to do the same.”
Customers will be able to choose to fix 25%, 50% or 75% of their loan, with the remaining percentage on a lifetime tracker at exactly the same rate as the fixed proportion. The actual interest rate depends on the proportion fixed and the LTV amount.
Andrew Hagger, spokesperson for Moneynet, said: “This innovative move from HSBC is a positive step and should be applauded.”
