HSBC pulls low-deposit mortgages after surge in demand
HSBC UK today said it was restricting its low-deposit mortgages to those switching rates after a surge in demand.
The bank said it is “temporarily reserving its mortgages over 85 per cent Loan to Value (LTV) for those customers switching rates.”
HSBC was the only High Street bank to continue to offer 90 per cent mortgages to customers throughout the pandemic.
The move is a blow to first time buyers who may struggle to pull together a deposit worth 15 per cent of the value of a house.
HSBC said withdrawing the mortgages was a temporary decision following a surge in demand from customers.
The bank said 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.
HSBC UK’s Michelle Andrews said: “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.”
She added: “Temporarily reserving our mortgages at over 85% 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.”
Nationwide tripled its minimum required deposit from first time buyers in June, as it steadied itself to avoid a crisis should the economy worsen.
The country’s second-largest mortgage lender said it would be increasing its minimum deposit from five per cent to 15 per cent, withdrawing loan deals for new customers.