Mortgage customers will find the new HSBC split loanmortgage difficult to comprehend, says an expert.
Paula John, editor of Your Mortgage Magazine, said the split-loanmortgage scheme may be a "layer of complexity too far for the average mortgage borrower".
She added that although the part repayment, part interest-only structure of the scheme may be difficult, it is a market first in terms of flexibility.
It gives the customer the power to decide how they want to pay back their interest. The scheme may be of particular interest to those who would like to "hedge their bets", she suggested.
According to HSBC's proposed schemes, customers can now secure some of their mortgage while the rest of it is tracked on a base rate fixed by the Bank of England, which is presently 0.5 per cent.
After paying a processing fee of £999 clients can borrow up to £500,000.
The government axing the stamp duty for first-time buyers will hardly have an effect because most homebuyers do not have the necessary funds to put down an initial payment, according to a recent GfK Financial survey.
Figures from the study also show that last year, the number of first-time buyers taking out a mortgage dropped by 100,000 compared to February 1993 when the housing market had dipped to it lowest previously.
GfK Financial claims that of the 300,000 people under 30 years old who are struggling to invest in their first homes, more than half will fail in their efforts.
Ms John added that she was sceptical about the fluctuations in mortgage prices. Her thoughts were echoed by Ducalian head Timothy Lambert, who advised homebuyers to play it safe and not bank too much on cheap mortgages.
The National Association of Estate Agents has published figures which reflect a drop in the number of customers buying their first properties. |
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