For many months there have been grave concerns for the many homeowners that took out cheap fixed rate mortgages two or three years ago, and were due to come off the special deals. This is because a combination of interest rate hikes over the past two years, coupled with the effects of the global credit crunch and tighter lending conditions, meant that many would end up with a far higher interest rates and far higher repayments, and many would have found this impossible to afford. This could then lead to an increase in the level of repossessions.
However, in April the HSBC launched what looked to be a tempting offer aimed at these homeowners, where the bank offered to match the rate that they were currently on enabling them to continue with their affordable repayments. There were eligibility conditions that had to be met, and borrowers were asked to pay an arrangement fee of up to £5000 depending on how much they were borrowing and the rate of interest being charged on the loan.
However, it has now emerged that HSBC has hiked up these fees further. The Rate Matcher mortgage loan was only supposed to be offered on a short term basis, but the popularity and demand resulted in the bank extending the offer. However, the fees have now rocketed, and those taking out a £250,000 mortgage at 4.79% will now pay nearly £8000 by way of an arrangement fee rather than the previous £5000. Some other customers could even end up paying up to £10,000.
An official from the bank said: 'We were left with a choice of pulling the offer or increasing fees.' In the meantime Alistair Darling, the Chancellor, has been warning banks to stop ripping customers off with hefty arrangement fees, and is in talks with the Financial Services Authority with regards to coming to a figure that can be classed as a fair fee.
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