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HSBC to lend more to low-deposit borrowers

Monday, 17 October 2011 10:54 AM

HSBC has promised to lend an extra £350 million to borrowers with a deposit of less than 15 per cent this year.

And £250 million of the funding, which has a maximum loan to value of 90 per cent, will be reserved for first-time buyers.

The bank says more than three-quarters of non-home owners still hope to buy even though the number of first-time buyers has fallen to just 200,000 in the last three years.

It has already lent twice as much to borrowers with a deposit of 15-20 per cent in 2011 as it did in the whole of 2010.

The £350 million would fund 3,300 mortgages at the current average advance for a first-time buyer of £106,000.

Rates on the new first-time buyer mortgages depend on the deposit. With a 10 per cent deposit, borrowers would pay 4.09 per cent above base rate (currently 4.59 per cent) on a tracker or 4.49 per cent for a two-year fix.

With a 15 per cent deposit, the tracker rate is 3.49 per cent above base rate and the two-year fix is available at 4.29 per cent. All rates are fee-free.

Peter Dockar, head of mortgages, said the new lending showed "HSBC's commitment to continuing to help people get on the housing ladder".

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