HSBC to cut UAE mortgage rates

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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