HSBC to cut UAE mortgage rates

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RATE REDUCTION: HSBC is to cut its mortgage rate by 100 basis points. (Getty Images)

HSBC is to cut the mortgage rate for its Flexi Loan customers in the UAE by 100 basis points from July 1.

The rate reduction also applies to home finance customers of the bank’s Islamic unit, HSBC Amanah.

Customers of HSBC’s tracker EIBOR based mortgage will also see their rate adjusted to the three month EIBOR rate.

The EIBOR-based mortgage guarantees to follow the three month Emirates Interbank Offered Rate (EIBOR), which has come down to 2.45 percent from 4.29 percent at the beginning of the year, according to data from Bloomberg.

“With this latest adjustment our customers will see a significant difference in repayments over the course of their loans,” said Abdulfattah Sharaf, CEO of Personal Financial Services in the MENA region.

The move is in line with HSBC’s commitment to review pricing every quarter, the bank said.

HSBC Middle East decided to re-enter the UAE mortgage market in April after all but pulling out of the home loan market due to the liquidity crunch. It now offers 75 percent financing on completed villas, 70 percent on completed apartments and 50 percent on off plan units.

Previously its loan to value ratio had been lowered to 60 percent and 50 percent for villas and apartments, in a tightening of lending policy that was mirrored across the sector.

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READERS' COMMENTS

HSBC interest rate up & down like a yoyo
Posted by SNY, Dubai, UAE on Saturday 25 July 2009 at 13:26 UAE time


Great news! However last summer we all came back from summer vacation to find HSBC had put our interest rates down 1% and then put them back up 1.25% so we are now back to square one pretty much with a drop of 1% again!

We just want interest only mortgages available here as well like Europe with realistic interest rates at 4% everyone would like to buy but the banks have got it all wrong here i'm afraid - its down to the government to change and offer more competitive mortgages.

Lesson for Tamweel
Posted by Nacheez, Dubai, UAE on Tuesday 30 June 2009 at 14:47 UAE time


I commend HSBC for making this move and I hope this will contiue in the same direction and will be followed by others. I have financed my house through Tamweel and still pay a hefty 8% odd.
I would have liked to pursue the HSBC Amanah option but I don't think the report is correct about rates being adjusted to three months EIBOR rate (of 2.45 %). I am sure the end finance cost would still be in the region of 7.5%

Perhaps HSBC can clarify

Regards

Why its not a big deal
Posted by ben, Dubai on Thursday 25 June 2009 at 05:43 UAE time


Two points most people miss out on\

a) While the LTV and rates are down, the requirements are as stringient as ever given the increase in defaults HSBC and other insitutions are seeing for their credit cards and auto finance. Its one thing not to pay your Visa, its another when the bank is left holding a multi million dirham property in a down market

b)A lot of the people who purchased are punters- They don't want to have a mortgage(which is quite expensive to other parts of the world btw) and deal with that nonsense. They want to flip-plain and simple. Bringing a mortgage into the equation only increases their cost of selling.

To Omar & Shakir
Posted by Moe, Dubai, UAE on Wednesday 24 June 2009 at 16:10 UAE time


Guys, stop jumping on every report giving your shinny overoptimistic points of view, that is not fooling anyone, you know what, am still not buying a property here in Dubai this year, not before i sell the Three i have already, which i cant sell for 75% of the purchase price . Cheers guys and Goodluck

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