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HSBC withdraws 90 per cent LTV mortgages for new customers

  • 02/09/2020
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HSBC withdraws 90 per cent LTV mortgages for new customers
HSBC has temporarily withdrawn its 90 per cent loan to value (LTV) mortgages from new business to support its service levels.


The lender said it was making the move, which came into place today, as a result of “very significantly increased demand for higher LTV mortgages”.

It will continue to offer products above 85 per cent LTV for existing customers switching rates.

Customers with appointments in place for mortgages over 85 per cent LTV and pipeline applications from brokers and customers that have already been received will be progressed subject to the usual checks, it added.

The lender had been one of the few to continue offering 90 per cent LTV mortgages for new customers since the coronavirus pandemic hit, but has finally had to take a step back.


Significant service level consequences

HSBC UK head of buying a home Michelle Andrews said: “While the worst effects from Covid-19 appear to have thankfully passed, the country and the housing market have yet to return to normality.

“Mortgage market participation has been volatile at higher LTVs which has led to significant consequences on service levels and our colleagues for those who, like HSBC UK, have remained open for business at those higher LTVs.

“This is a temporary change for us. We look forward to other lenders joining us back in the market as well.”

Andrews noted that easing lockdown and the stamp duty cuts had “injected fresh impetus” to first and second-time buyers who may have a smaller deposit.

However, she added the increase in demand meant the lender was not able to satisfy service levels and did not want to face putting property purchases at risk.

“Offering a competitive product and being able to provide a great and timely service is extremely important to us and the recent significant uptick in applications has meant that we have not been able to consistently meet the high standards we set ourselves, which is not always a positive experience for our customers and can delay and put a property purchase at risk,” Andrews continued.

“As such we continually review our proposition and service levels and adjust how we are working and try to manage the inflow of new cases.

“Temporarily reserving our mortgages at over 85 per cent LTV for those switching rates only is not a decision we have taken lightly, but one we will be reviewing regularly.

“We remain open for business and continue to support our customers and the wider housing market.”



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