HSBC Home Loans Offer 'Portability'

Reported in the local papers, HSBC’s home mortgage clients now enjoy the portability feature of not losing their time-related loyalty discounts on its SIBOR loan packages.

Usually when home owners sell their current property (with an existing loan) and take up a new loan for the bought property, they have to scout for this new loan based on prevailing packages offered in the market. If they wanted to retain favourable terms of their prior loan (for the sold property), this is unlikely. Therefore, HSBC’s proposition is for existing clients on its SIBOR loan packages to carry forward their current discount level to the new home.

Specifically, the 2 SIBOR loan packages are the SIBOR Loyalty package or the SIBOR Relationship-based package. The former refer to a 3yr no lock-in loan with decreasing interest spread, while the latter is a 10yr involvement where the interest rate spread eventually declines to zero during the final year. Relationship-based customers also need to have a minimum of $100,000 or equivalent banked with HSBC either through deposits, investments and/or insurance. They would need to maintain an annual average of this amount throughout the 10yr relationship.

Provided general interest rates remain low for an extended period, this loan portability feature does seem an attractive frill thrown in to keep its home mortgage clients.