HSBC has provided a boost to the ailing mortgage market by offering a range of products with loan-to-value ratios of up to 90 percent.
HSBC has revealed part of its mortgage spending plans for 2009, launching a range of new products.
The bank has allocated £15 billion towards mortgage lending this year, double the amount it lent in 2007. Some £1 billion of the total is set to go towards new offerings with loan-to-value ratios of up to 90 percent.
While the mortgages are only available for HSBC Plus account and Premier customers, the bank has encouraged its current account clients and other consumers to open a Plus account and sign up for a mortgage.
According to HSBC, it is introducing the products because first-time buyers and homeowners with limited cashflow have been unable to benefit from the declining cost of borrowing. This trend has been aided by the Bank of England lowering its base rate to the unprecedented level of 0.5 percent.
The new mortgages will be available to buyers who are only able to afford a ten percent deposit and will have an interest rate of 4.99 percent, fixed for two years.
"Although house prices have fallen, and continue to fall, they won't fall forever," said Joe Garner, group general manager of the bank's personal financial services.
"At HSBC we are standing by our customers through thick and thin and these changes mean we can continue to give customers the best possible deal on their mortgage. This is a one billion pound commitment and it says we appreciate our customers' loyalty."
