Is HSBC A Good Mortgage Lender?

Is HSBC a good mortgage lender? If you already do business with HSBC, need a sizable loan, and have solid bank assets, you should consider them. Additionally, it can benefit borrowers from other countries. However, in order to learn how much you might be eligible for, you’ll need to speak with a loan expert.

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Is HSBC a good mortgage lender?

You will have to decide for yourself whether HSBC is a good mortgage lender, as you must with other mortgage lenders.

We found no evidence to support the claim that HSBC mortgages are a problematic mortgage lender during the course of our study.

Additionally, you should be aware that the FCA regulates all mortgage lenders in the UK, and as a result, they are all required to adhere to a set of basic requirements. All FCA-regulated businesses, including mortgage lenders, are required to “serve clients properly.”

You may be eligible to get compensation from the financial services compensation scheme if a mortgage lender treats you unfairly.

HSBC Mortgage Key Features

HSBC’s mortgage portfolio is as diverse as the homebuyer landscape itself, comprising term tracker-rate and fixed-rate mortgages catering to both residential and buy-to-let borrowers. For borrowers earning under £100,000, HSBC extends lending options of up to 4.75 times their income, while those with earnings exceeding £100,000 can access mortgages up to 5.50 times their income. Flexibility is further exemplified by mortgage terms spanning 5 to 35 years, accommodating a range of financial plans. Mortgage booking fees fall within the £0 to £1,999 range, and HSBC sweetens the deal with cashback mortgage offers. It’s important to note that buy-to-let borrowers must have ownership of three or fewer buy-to-let properties, as portfolio landlords are not entertained. Additionally, fixed-rate and term-tracker mortgages permit annual overpayments of up to 10% on the original mortgage balance without incurring early repayment charges.

Types of Mortgages Offered by HSBC

HSBC caters to a diverse clientele, offering mortgages and remortgages to various buyer segments:

1. First-time Buyer Mortgages

For those embarking on their homeownership journey, HSBC provides tailored mortgage solutions.

2. Home Mover Mortgages

Existing homeowners seeking to transition to a new property can explore HSBC’s offerings, designed to facilitate smooth transitions.

3. Buy-to-Let Mortgages

Investors looking to venture into the buy-to-let market can find suitable mortgage products at HSBC.

4. International Mortgages for Expats

Expats desiring to purchase property abroad can leverage HSBC’s international mortgage services. However, this option necessitates the possession of an Expat bank account, initiated through HSBC UK, which facilitates connections with HSBC mortgage advisors in the target country. The available types of international mortgages are contingent on the offerings of HSBC in the respective country and may vary from what’s accessible through HSBC UK.

5. Capital Repayment and Interest-Only Mortgages

HSBC offers both capital repayment and interest-only mortgages. The latter is accessible to borrowers who can demonstrate a viable repayment method or possess other financial products that guarantee the mortgage balance’s settlement at the end of the term.

As a prominent high-street lender, HSBC extends competitive rates for fixed-rate and tracker-rate mortgages, spanning 2, 3, and 5-year fixed-term deals. Homebuyers can directly apply for HSBC mortgages or collaborate with mortgage brokers. Notably, engaging a mortgage professional can unlock access to exclusive deals not available to direct customers. These experts scour the market, aligning the best-fit mortgage with individual financial circumstances. Moreover, customers can employ HSBC’s Mortgage rate comparison tool to search for the current mortgage rates aligned with their specific borrowing needs. This tool comprehensively sifts through over 20,000 mortgage deals available in the market, ensuring an informed decision-making process.

Borrowing Potential with HSBC Mortgages

HSBC leverages a straightforward approach when determining the borrowing capacity for mortgage applicants. The key determinant is the loan-to-value (LTV) ratio, and it is subject to the following income multiples:

HSBC Income Multiples

Salary Up to £44,999: 4.49 times (LTV over 85%) and 4.49 times (LTV 85% or under)
Salary £45,000 to £99,999: 4.49 times (LTV over 85%) and 4.75 times (LTV 85% or under)
Salary £100,000 and over: 4.49 times (LTV over 85%) and an impressive 5.50 times (LTV 85% or under)

Buy-to-let mortgages from HSBC are tied to rental income exclusively, and at least one applicant must be the owner-occupier of a residential property. Additionally, one applicant must substantiate earnings of at least £25,000 without factoring in rental income.

Maximum Loan Size and Loan-to-Value (LTV)

The maximum loan size and LTV ratios vary based on the type of mortgage:

For a House Purchase with HSBC

Up to £500,000: 95% (Capital Repayment) and 75% (Interest-Only)
£500,001 to £550,000: 90% (Capital Repayment) and 75% (Interest-Only)
£550,001 to £750,000: 85% (Capital Repayment) and 75% (Interest-Only)
£750,001 to £1,000,000: 80% (Capital Repayment) and 75% (Interest-Only)
£1,000,001 to £2,000,000: 75% (Capital Repayment) and 65% (Interest-Only)
Over £2,000,000: 65% (Capital Repayment) and 50% (Interest-Only)

For Remortgages with HSBC

Up to £500,000: 90% (Capital Repayment) and 75% (Interest-Only)
£500,001 to £550,000: 90% (Capital Repayment) and 75% (Interest-Only)
£550,001 to £750,000: 85% (Capital Repayment) and 75% (Interest-Only)
£750,001 to £1,000,000: 80% (Capital Repayment) and 75% (Interest-Only)
£1,000,001 to £2,000,000: 75% (Capital Repayment) and 65% (Interest-Only)
Over £2,000,000: 65% (Capital Repayment) and 50% (Interest-Only)

For Buy-to-Let Mortgages

Up to £1,000,000: 75%
£1,000,001 to £2,000,000: 60%
Up to £50,000 additional borrowing for debt consolidation: 60%

Mortgage loans from HSBC in one place

Yes, conventional loans
Yes, refinancing
Yes, jumbo loans
Rate adjustments: Yes
Yes, fixed rates (30 and 15 years)

The United States is only one of the many nations where HSBC operates branches. In American cities like Chicago, Los Angeles, and New York, it provides financial services.

The wide selection of house loans offered by HSBC is among the main advantages of using them for a mortgage. Additionally, HSBC is rather open about disclosing its daily mortgage rates.

What kinds of house loans does HSBC provide?

Home Value Loans, Variable and Fixed Rate Loans, and Premier Loans are some of the home loans that HSBC offers.

To meet your demands, the majority of their home loan product lines include owner-occupied, investor, interest-only, fixed, and 100% offset alternatives.

Their Premier customers get an HSBC Premier Mastercard with HSBC benefits, no annual credit card fee, and the choice of a personal relationship manager as a point of differentiation.

Who can benefit from an HSBC loan?

It might be useful to look into HSBC if you’re interested in getting a mortgage but aren’t sure where to begin. You can choose from a variety of mortgage products offered by the bank.

Additionally, if you currently use HSBC banking services, automatic payments from a qualifying checking account can qualify you for a rate reduction on your mortgage. (However, you’ll want to check the fine print because the HSBC Preferred Mortgage program has a minimum balance of $10,000.)

The bank does provide possibilities for affordable home ownership. Additionally, HSBC might be the best option for you if you’re a foreign borrower trying to buy a house in the United States.

How to apply for a mortgage with HSBC

There are several methods to begin the mortgage application process with HSBC if you’re interested. A home loan expert will contact you once you submit a brief online form with your information to finalize a rate quote. If you need a little more guidance through the procedure, you may also contact the bank directly and chat with someone.

An HSBC representative will get in touch with you when you’ve submitted all of your information to complete the application process. They’ll provide you with a list of the things you’ll require moving forward.

How to Get the Best Rate on an HSBC Mortgage

Mortgage rates from HSBC are clear and frequently lower than those of its larger big bank competitors. Having said that, if you have a solid credit history and a history of on-time payments, their rates may occasionally be further reduced in the case of an insured mortgage.

Before requesting the lowest mortgage rates from HSBC, as with any lender, make sure to do your homework. Compare the rate that is being provided to other lenders’ rates. Just be certain that your comparisons are apples to apples. To put it another way, make sure the prices you’re comparing have the same features, terms, and conditions.

Pre-approvals by HSBC

HSBC provides a free, no-obligation pre-approval so that you are aware of the exact amount you must spend on your new house. Pre-approvals from HSBC are valid for 90 days, but they can simply be extended if your eligibility hasn’t changed materially.

Pre-approvals are valid for brand-new purchases, refinanced HSBC mortgages, and refinanced loans from other lenders.

An HSBC pre-approval can be obtained in a variety of ways. Online, over the phone, or in person at an HSBC facility, applications can be initiated.

Renewing a mortgage with HSBC

Unlike many large banks, HSBC typically extends its best rates to returning clients as well. Additionally, a new “automatic renewals” option is available to streamline the renewal procedure both online and in branches.

Do your comparative rate research before negotiating your HSBC renewal rate, and make sure you have a solid credit history and a manageable debt burden. If not, your only choice may be to stay with HSBC (and not a bad option at that).

Start looking into renewal options as soon as possible to give yourself time to compare lenders. Three months prior to your renewal date, HSBC advises contacting its mortgage experts.

HSBC Mortgage Fees

HSBC presents a transparent fee structure:

Legal Fees

Should you choose to engage your solicitor, and HSBC approves them, legal fees are payable directly to the solicitor. Alternatively, if HSBC appoints a solicitor, a fee of £295 applies.

Booking/Application Fee

The booking fee for HSBC mortgages ranges from £0 to £1,999, contingent on the chosen mortgage deal. Fee-saver mortgage deals, which do not entail a booking fee, typically come with slightly higher interest rates.

Valuation Fee

HSBC offers a standard valuation as part of the application process, with borrowers responsible for any in-depth reporting requirements, such as a homebuyer report or a full building survey.

Completion Fee

Upon the transfer of mortgage funds from HSBC to your solicitor, a completion fee of £17 applies.

Exit Fee

HSBC refrains from imposing exit fees when you repay the full mortgage balance.

Pros of HSBC

Some advantages of obtaining a mortgage with HSBC include the following:

Security: HSBC is a respectable lender in Canada and around the world, just like Canada’s Big Six banks. They can implement the greatest controls and procedures to guarantee the very best security for your financial transactions thanks to their nearly boundless resources.
Full-service: You have access to a wide variety of extra banking products when you open a mortgage with HSBC, including banking or investment accounts, secured or unsecured loans, etc.
Competitive Rates: Working with a major national bank may result in somewhat higher rates as a trade-off. For some terms, HSBC’s quoted rates are actually quite competitive when compared to those of its big-bank rivals. The nicest thing is that the lowest HSBC rate may be obtained without any haggling. The majority of Canadian banks are unable to speak.

Cons of HSBC

Some drawbacks of obtaining a mortgage from HSBC Shorter Rate Hold Period include the following:

Most of HSBC’s rates have a shorter 90-day rate hold compared to some of the other major banks, which offer 120-day or, in the case of BMO, 130-day rate holds. Depending on your circumstances, this may or may not be significant, but a longer rate hold period gives you more opportunity to browse and compare rates after receiving your pre-approval.
Fewer Options: Getting a bank mortgage has the drawback that they only sell their own mortgages. It might not have the appropriate mortgage package for your particular scenario as a result. Especially if your mortgage requires default insurance, you can frequently find more flexible mortgages elsewhere for a similar or better rate (or is already insured).
Unfavorable Prepayment Penalty: HSBC calculates its early-breakage penalties on fixed-rate mortgages using a “discount from posted rate” formula, similar to Canada’s main banks. Your fine may increase by thousands as a result. The argument against it is that HSBC offers reasonable refinance rates, which eliminates the need to switch lenders in search of a better offer before the loan matures. Notably, HSBC’s variable rates, which have one of the finest prepayment policies in Canada for a closed mortgage, are exempt from the penalty comment.
Customer contentment: When applying for a mortgage there or needing to make any changes to the mortgage, HSBC is notorious for providing less than stellar customer service feedback. A bank appointment with them must be scheduled 5–10 days in advance, and within that time, a lot might occur. You can take advantage of some incredible promotional bargains if you have the patience and willingness to cope with this.

Mortgage calculators from HSBC

To assist you with your mortgage shopping, HSBC provides a variety of mortgage calculators. Using their calculators, you

Choose your monthly payment amount.
Find out how much you can borrow.
Determine prepayment fees
Estimate your potential savings with an HSBC Smart Saver Mortgage.
Estimate your potential savings with an HSBC Equity Power Mortgage.

Four things to know regarding a mortgage loan from HSBC

1. A range of loan possibilities

In addition to conventional loans and jumbo loans, HSBC also provides fixed-rate and adjustable-rate mortgages.

For current HSBC clients who want to take out a large loan with a jumbo mortgage, there are also a lot of deals available. However, the majority of these programs target affluent borrowers.

The bank is rather open about disclosing on its website the lowest daily mortgage rates. That can make comparing rates amongst lenders simpler if you’re just starting the mortgage shopping process.

2. Provides initiatives to help first-time borrowers achieve homeownership.

Additionally, HSBC provides initiatives that help those who require assistance in purchasing a home make homeownership more feasible. Here are some of the possibilities.

Communities in Need — This program provides closing cost assistance of up to $5,000. Additionally, it can be combined with other valid grants to lower the cost of owning.
HomeReady – With a down payment as low as 3%, you might be able to get approved for an HSBC HomeReady mortgage. For qualification purposes, the bank also permits borrowers to add a co-borrower or renter who is not an occupier.
Home Possible – The Home Possible Mortgage has a fixed interest rate and a 3% minimum down payment requirement. Homebuyer education classes must be completed by first-time buyers.
Homebuyer Dream Program: Only some residents of New York and New Jersey are eligible for the Homebuyer Dream Program. If you qualify for the program, you may be awarded a grant of up to $9,500 to go toward your closing costs and down payment. You must be a first-time home buyer and reside in one of the eligible counties in New York or New Jersey in order to be eligible.

HSBC also provides FHA and VA loans that are backed by the government. Both loans have minimal down payments, and you are permitted to use family members’ gifts to cover your closing costs.

3. A cash-out refinance option is offered for home equity.

A home equity line of credit, or HELOC, up to $250,000 is additionally available from HSBC. You only pay interest on the money you actually borrow with a HELOC, a revolving line of credit based on your home equity.

Additionally, if you already have an account with HSBC, you can set up auto payments from a supported checking account to get a 0.25% rate savings.

On your home, the bank also provides a cash-out refinance option. A cash-out refinance entails replacing your current mortgage with a bigger one and giving you the difference as cash.

Both of these choices are advantageous since they enable you to access the current equity in your house. You may find it simpler to accomplish other financial objectives as a result, such as finishing a home improvement project or debt consolidation.

4. An excellent choice for foreign borrowers

HSBC is a wonderful alternative to take into consideration if you’re a worldwide borrower looking to purchase a home in the United States. The bank provides loans with fixed and adjustable rates that can be financed up to $4 million. However, in order to be eligible, you must present specific supporting papers, and you must pay your mortgage in US dollars.

Alternatives to HSBC.

You have a window of time when several credit inquiries are only counted as one for your credit scores if you’re looking for a mortgage. Normally, you have 14 days, however the length may vary based on the scoring methodology.

Better Mortgage: Better Mortgage offers an easy online application procedure for mortgages and might be able to present you with a loan quote in just a few minutes.
The Axos Bank: If new and existing clients who obtain a mortgage from Axos Bank fulfill certain requirements, they may be eligible for waived lender costs as well as cash back on their mortgage payments.

Conclusion

In summary, HSBC stands as a reputable high-street lender with a penchant for offering competitive fixed-rate and tracker-rate mortgages over 2, 3, and 5-year terms. Although HSBC can potentially extend borrowing capacity up to 5.50 times your salary for eligible applicants, it may be prudent to explore other lenders for more favorable salary multiples. To make an informed comparison of HSBC’s mortgage offerings with the broader market, collaborating with an experienced mortgage broker is a sound strategy. Independent brokers can harness their expertise, insights, and access to a diverse array of mortgage deals, ensuring that your mortgage aligns seamlessly with your unique financial circumstances.