HSBC Loan Guide

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HSBC is a multinational bank with 36 branches in Australia. They provide personal banking, commercial banking, financial planning, loan options, and a wide range of other financial services to customers across the world.

HSBC is a multinational bank with 36 branches in Australia. They provide personal banking, commercial banking, financial planning, loan options, and a wide range of other financial services to customers across the world.

HSBC has origins that date back to the mid-1800s when Hong Kong was still a British colony. They initially called themselves the Hongkong and Shanghai Banking Corporation, which is where the abbreviation came from.

The first HSBC bank came to Australia nearly 100 years after the bank was first created. In 1965, the bank became established in Australia as HSBC Finance Company. It has expanded since then, and now services a wide range of needs for Australians and customers all over the globe.

HSBC offers their customers six different home loan options. They don’t limit their customers to only fixed or variable-rate loans. The loan options you can choose from are as follows:

  • Home Value Loan
  • Variable-Rate Loan
  • Fixed-Rate Loan
  • Home Equity Loan
  • Home Smart Loan
  • Market Linked Loan (Investment property)

HSBC gives borrowers a few different features with their home loan packages. Most of these features are loan-type specific, so check the breakdown of each loan type listed below.

Portable Loans:

You can transfer your loan to a second house if you decide to move over the course of your loan. Of course, you’ll have to receive approval from HSBC for this to apply for this feature.

Offset Accounts:

Offset accounts are available for select loans through HSBC. If you already have an account with them, you can choose to offset your loan amount with interest from your savings account.

Split Home Loans:

HSBC allows borrowers to split their loan between multiple loan types. You can work with an advisor to find the best combination of loan options that fit your needs.

HSBC offers borrowers a variety of different home options. With HSBC, you have more options than just a standard fixed or variable-rate loan, though they offer these options as well.

Ahead is a breakdown of each loan type, as well as some of the features you can expect by choosing each loan.

Home Value Loan:

The Home Value Loan is a variable-rate loan for those who don’t have the time to spend on a lengthy application process.

HSBC will assign you one of their Relationship Managers who can help guide you through the entirety of the loan application process.

You can apply for a loan amount from $50,000 to $7,500,000 for a period of one to 30 years. There are flexible repayment options of monthly, fortnightly, or weekly, but if you choose the interest-only options, you must make monthly repayments.

Additional repayments are unlimited – as is the case with all variable-rate loans through HSBC – as are redraw facilities. The only caveat to the is that after the first monthly repayment you’ll have to pay a $20 redraw charge unless you use their internet banking portal.

Variable-Rate Loan:

HSBC’s variable-rate loan option offers similar features to their Home Value loan. You can borrow up to 90% of the loan-to-value ratio, with the same financial constraints as any of their home loans ($50,000 to $7,500,000).

You can make unlimited additional repayments and redraws with variable-rate loans through HSBC without any fees. You will only have to pay a $20 withdrawal fee if you don’t use their online banking portal.

If you have an account with HSBC, you can use their offset account feature for variable-rate loans as well.

Fixed-Rate Loan:

A fixed-rate loan through HSBC offers you some protection from rate increases for a period. The interest will be fixed for anywhere from one to five years.

Other than the interest change, the terms of the loan are similar to that of HSBC’s variable loans. You will have the same borrowing parameters, no monthly fees, and a $600 establishment fee.

The features of fixed-rate loans are more limited than they are with variable-rate loans.

You can only make extra repayments up to $10,000 a year, and you won’t be able to redraw extra repayments once you make them.

Home Equity Loan:

HSBC’s home equity loan gives you the ability to obtain a line of credit for no fixed term. You can choose to pay interest-only on your home equity loan, and you’ll be eligible as long as you have at least 20% equity in your home.

You can make unlimited additional repayments if you choose to, and withdraw your extra funds for no fee.

Home Smart Loan:

Home Smart Loan allows you to combine an equity loan, savings, and income into one account. Adding additional funds to the account means you interests rates will decrease.

You can make unlimited extra repayments and withdraw your additional funds through the Home Smart Loan, just as you can with any variable-interest rate through HSBC.

Market-Linked Loan:

HSBC offers their market-linked loan exclusively to HSBC premier customers. They designed it to attract foreign investors from Hong Kong and the US who want to invest in Australian property.

Unfortunately, there are no online options to apply for a loan through HSBC. You can inquire about a loan by imputing your information, but this will only result in a call or email from a representative.

Visit an HSBC branch with your financial and other pertinent information. A loan officer will be able to assist you with the process from there.

Redraw facilities are available for borrowers who choose variable-rate mortgages through HSBC. Borrowers can withdraw an unlimited amount of their additional funds for any of the variable-rate loans, but it will cost you a $20 fee if you don’t use the HSBC internet banking portal.

There are no redraw facilities available during the fixed-rate period of your mortgage. If you make extra repayments, you cannot withdraw them.

Extra repayments are available for all types of loans through HSBC. A lot of lenders disallow those with fixed-rate loans to make extra repayments during their fixed periods. Instead, HSBC caps how much you can repay in a year before incurring fees.

Additional repayments are unlimited for any variable-rate loans. You can pay off your loan quicker without facing fees if you borrow through HSBC.

Fixed-rate loans, on the other hand, are capped at $10,000 a year. After that, you will have to pay a “break cost” for any extra repayments.

Keep in mind, though, that HSBC does not allow fixed-rate borrowers to withdraw funds once they make additional repayments. Make sure you can afford the extra repayments if you have a fixed-rate mortgage through this lender.

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