Does HSBC negotiate on interest rate

amit175

Hi,

I am looking for a 80% LTV fees-free product from HSBC for a home purchase. I visited the branch today & was asked "what rate were you previously quoted". Unwittingly I told what I saw on the internet. But I suspect I was asked this, because perhaps there may be a possibility that I could be offered a discount. Does anybody know if they negotiate. If not on the interest rate, do they give any additional benefits. Someone told me they can update the current bank status to "Premier".

powerwin

Whilst I can't say what HSBC's policy is, I can say that in general, a financial services company will always be keen to write profitable business, and if beating a competitor's quote will still give them a deal that meets their business criteria (e.g. their lending criteria), then they'll do it. If you don't ask you don't get, so it's always worth having a good knowledge of the market and playing one company off against another.

Rgds

Dom3663

I'm not sure about the above.
HSBC put their mortgages on offer like you put a product in a shop window.
If you say to me I'll buy that product but at discount price then I'll politely turn you away.
Surely if they could afford to offer you a "special" deal they could offer that to everyone...and as the deal would be so good it would attract alot of attention and would be initially advertised that way.

I'm sure I did see some mortgages when I was searching at various lenders for "premier" account holders only. These accounts can come with a monthly charge often negating the savings made.

inca_2

It's not the simple as wanting to beat someone else's rate though where mortgages are concerned. Obviously I can't say that no lender will do this as I don't have that kind of knowledge about every lender, but I'd be surprised if they did. A rate is priced at that rate for a reason and the money is often bought at a particular price and a certain amount of lending alloted to that rate. There are other factors too including the risk of lending (linked to LTV, type of mortgage etc). Same as with anything else though it doesn't mean that there's any harm in asking the question, the worst that happens is that someone says no.

_Andy_

They don't 'negotiate' on rates.

Conrad

Lenders do not negotiate on rate. A mortgage contract has to be built using armies of lawyers and underwriters and also underwriten by insurers and so on and the deal is costed for a given risk.

To start ammending the contract and selling costed products to the wrong risk band would throw the whole system into turmoil. For example investors that provide lenders money to lend would sue the lenders for breach of contract (selling thier money to higher risk bands without charging the comensurate higher rate needed).

The administration involved in tweaking certain products would also be vast and lead to all sorts of future errors.

powerwin

OK, so they wouldn't be able to improve the rate on a given mortgage product being offered, simply because that would be way too complex for them from an administration point of view.

Maybe though in some cases they would be able to tell you about another product that would be more competitive, one which they don't tend to shout about?

I'm just saying it's always worth telling a given company that "Competitor X can do this", and then asking "Can you do anything better?".

Rgds