HSBC, Britain’s largest bank, has promised to boost lending to first time buyers. The bank says it will lend a total of £1.5 billion to home buyers with very small deposits before the end of the year.

The lender, which has launched an aggressive campaign to increase its share of the mortgage market since the onset of the credit crunch, said it will boost lending to home buyers who have managed to raise a deposit of just 10%. HSBC has already lent £1 billion to borrowers in this category this year.

Martijn van der Heijden, head of mortgages at HSBC, said: “Houses prices seem to have bottomed and rates are low – and many of those who put off [buying a house] last year are starting to look around again.”

He added: “HSBC has been out there throughout the recession, staying open for business for our customers. While other lenders were in retreat, we became the UK’s largest lender in the first half of 2009 on a net lending basis.”

Before the collapse of Northern Rock, mortgages with a 90% loan-to-value ratio were widely available. However, lenders quickly removed these deals in early 2008 as the property market began to slump.

Currently HSBC offers its two-year fixed rate mortgage at 5.99%, and its five-year fixed rate deal at 6.49% - some of the best offers on the market.

The lowest rate for those with a 10% deposit is HSBC’s two-year discount at 3.89 per cent with a £1,199 fee. However, this figure could rise at any time because it relates to the fluctuating standard variable rate, rather than the Bank of England base rate. Tracker mortgages, which move with the base rate, are considerably more expensive at 4.59 per cent with a fee of £999.

This entry was posted on Wednesday, September 30th, 2009 at 1:58 pm and is filed under Banking, Housing Market, Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.