HSBC plots major push for low-rate mortgage

HSBC is launching a high-profile campaign to attract mortgage customers caught out in the credit crunch crisis, which has seen rival banks hike interest rates and cut products.

The move to increase its mortgage business is calculated to capitalise on uncertainty in the financial markets and comes as rivals reduce their lending risks.

The bank is extending its Rate Matcher mortgage to both new and existing customers. The aim is to woo those “worried” about higher rates for fixed rate deals coming to an end by June.

Moneysupermarket.com head of mortgages Louise Cuming says it is a “masterstroke” of marketing for HSBC, and a way of boosting its UK mortgage business, which “punches below its weight”. She says HSBC can afford to cherrypick the customers it wants but warns that the bank could find itself deluged by customer enquiries. She says: “HSBC could find its service levels substantially hit as it is deluged by customers wanting to take advantage of this mortgage ‘lifeline’.”

HSBC is able to profit over rival lenders because it does not use interbank funding for its mortgage book.

A spokesman for the bank says the campaign will be a “substantial” four-week push – running across online, national press and in branches. It has been created by WPP-owned 141 Worldwide. He says radio and TV are not being considered at present because of the high profile and continuous news coverage surrounding the international money markets and mortgage woes.

It has also operated a “cautious” approach to lending and despite being a “big four” UK bank, it is not one of the top ten mortgage providers by volume.

The HSBC spokesman adds: “It is certainly a move to take more share of the mortgage market. It is reflective of the fact that we have always been a very conservative lender but when the opportunity is there, as it is at the moment, we have seized it.”