HSBC variable rate rip-off

JonBack

In November I paid HSBC a whopping £2499 to 'purchase' a 2 year mortgage which had a discount of 1.26% off their variable rate of 6.25%.

As we all know, the BoE rate has since fallen by 2.5% - HSBC have dropped their standard variable rate by a total of 1.81%, leaving it at 4.44%.

HOWEVER, they have now disconnected my variable rate from their standard variable rate & are not passing on the last 1% cut, leaving 'my' variable rate at 5.44%.

In real terms, HSBC have passed on only 0.81% of the 2.5% rate cut. All of this means that I have paid nearly £2500 for a 0.26% discount from HSBC's standard variable rate!

It would be fair to say that I am furious - I have raised a formal complaint with HSBC to which I am awaiting a reply & have asked BBC's WatchDog if they are interested in running it as a story.

Is there anyone else out there with similar woes??

Jon

opinions4u

JonBack wrote: »

In November I paid HSBC a whopping £2499 to 'purchase' a 2 year mortgage which had a discount of 1.26% off their variable rate of 6.25%.
Is this link stated clearly in the terms and conditions of the offer? What exactly does it say?

As we all know, the BoE rate has since fallen by 2.5% - HSBC have dropped their standard variable rate by a total of 1.81%, leaving it at 4.44%.
The HSBC variable rate is still very competitive when compared to other lenders. I am not aware of any obligation for their SVR to do exactly what the BofE rate does.

HOWEVER, they have now disconnected my variable rate from their standard variable rate & are not passing on the last 1% cut, leaving 'my' variable rate at 5.44%.
Do you mean they are not passing on the BofE cut, or the cut to their own SVR? If it is the latter, you have cause for complaint. If it is the former, tough.

In real terms, HSBC have passed on only 0.81% of the 2.5% rate cut. All of this means that I have paid nearly £2500 for a 0.26% discount from HSBC's standard variable rate!
If you wanted a rate linked directly to the BofE rate, why didn't you take one? It seems to me that you've got what you paid for.

It would be fair to say that I am furious - I have raised a formal complaint with HSBC to which I am awaiting a reply & have asked BBC's WatchDog if they are interested in running it as a story.

Is there anyone else out there with similar woes??

The key on this is to clarify exactly what the mortgage offer said. Let us know if it does state "Standard Variable Rate minus 1.26%" or does it say "4.99% variable"?

Margin_Walker

They are passing on the latest 1% cut in the boe rate. It applies to the svr about a month after the cut. They do this when the rate goes up or down. your rate should drop by 1% tomorrow.