Calling HSBC mortgage holders in UAE

[football1]

Have any existing customers encountered issues availing of best available interest rates on their home loans? Are their mortgage customers of other banks who may have similar issues. If so would love to hear from you.
(I'm a journalist not a salesman!)
[email protected]

[BlueSkye]

No, their rates as advertised on the website was what I got. All depending on the deposit. YMMV.

[football1]

..thanks BlueSkye - I should have been more clear- I'm looking at cases of long standing mortgage customers who are still paying rates of 6 or 7 per cent and not being able to access the same deals that are being offered to new customers (in the range of 4 to 4.5 per cent).

[woodja51]

Wow only paying 6 or 7 percent! Try 8.25 with tamWeel who are offering 4% for new customers...and they wont budge... That is how they fund the cheaper loans .. Using the goose laying the golden egg to prop up new business... And of course most folks are under water with their loans so cant sell out in the current market, and move on without topup cash injected.

Hence the potential rise in defaults ...and of course that winds you up in Jail if you default, .... If you stay n DXB of course.

Funnily, banks relate the interest rates they charge to the risk of default . But what they miss is that high interest rates actually increase the possibility of default as the borrower has no skin in the game . If they dropped rates but kept repayments the same , equity would build quicker and folks might stay in the game longer...but they dont see it that way... Yet.

Good luck !

[Kennytheking]

What he said plus.....

I have a mortgage at Mashreq and about 2 years ago they decided that they didn't want to stick to the interest rate that we agreed upon(6 month EIBOR + 3%), so they decided to hike their rate by 25%.....from 5.8%(EIBOR was 2.8% then) to 7.35%.

Today the worthless piece of s#@t property that I bought for 2 million DHS is worth about 650k, meaning I have a mortgage well over 1 Million in the red.

Today EIBOR is around 2.2% and I am paying about 28 000Dhs per year more on a property that worth 35% of what I paid for.

I think they are a bunch of scum sucking bastards who have no honour and cannot be trusted. Not bad for a country that considers Usury as Haram.

[Gulfstreamaviator]

I had a HSBC mortgage, and yes the rate was in the order of 7%.... was advised it was the best rate on offer.

So paid up my mortage, and now have funds on deposit....

The difference between interest paid v interest on offer, is vast......

All banks are robbin hoods.....

glf

[SassyPilotsWife]

Last sale I did, my client got a mortgage of 5.5% at 80% at HSBC (well actually he got 100% :X ) helps to have a creative agent.

Previous sale b4 that 5.9% at 80% for EK Capt.

[BYMONEK]

SPW

WOW, 100% mortgage. Wasn't that the very reason why the US has ended up in such a mess with defaults.

Still, as long as you guys get your commission, who cares, right?

[Left Coaster]

And does she care what happens to those clients after the deal is closed? Most of the ones I've had dealings with could give a sh*t once the deal is signed...and really...did she answer your question or just brag? You make the call...;)

[SassyPilotsWife]

WOW, 100% mortgage. Wasn't that the very reason why the US has ended up in such a mess with defaults.

Still, as long as you guys get your commission, who cares, right? 7th Jun 2012 15:50

Yes, that is it. Everyone got 100% loans! No one lost their jobs, no one got furloughed, and property values did not decrease by 30%. You certainly can't blame the drooling buyers who would have never qualified to buy a goat let alone a house. Who filed bankruptcy twice in the past. Because surely they would have never signed for a mortgage that they knew they couldn't afford.

And yep, as long as we get our commission that is all that matters. Thats me :0) I'm filthy rich and I work for the fun of it. I never make friends with my clients. I'm too busy sailing off on my 85ft yacht after I leave the bank. And the only reason we are living in this sandpit almost 10,000 miles away from our family is because....

you take over on that part, it should suit your theories much better than mine. :ugh:

[ferris]

And the only reason we are living in this sandpit almost 10,000 miles away from our family is because.......we are 10,000 miles away from our family!

[givemewings]

Lol Ferris... sometimes that's the good part :E

[nolimitholdem]

It's pretty clear why SassyPilot would want to be at least 10,000 miles away from THAT....god what a nightmare. Bragging about being a parasite! Well, I guess you have to play to your strengths...

Sure glad I never jumped on the property bandwagon, but do feel bad for some who got burned. Here's hoping more get the nerve to just walk away and not look back at these greedy pieces of...

[BYMONEK]

I don't blame the buyers. I blame the greedy and corrupt banks chasing the commission as well as the hundreds of underqualified estate agents 'employed' in this part of the World. Do you honestly think that anyone who works on commission only will truly be able to offer unbiased opinion and advice?

It's because house values have the potential of dropping that any sensible bank would restrict the LTV amount. When people like yourself start promoting creative accounting, and still offer 100% mortgages or fiddle valuations, you merely encourage unnecessary risk purely for your own financial gratification. The risk is never with you, it's always with the buyer. In a less regulated and ethical environnment such as Dubai's, that misdemeanour is far easier to achieve. Your attempts at sarcasm fail to hide the corrupt and unethical ethos that are more readily accepted here in the UAE. I sincerely wonder whether you'd be so quick to offer such a loan were you to be employed in the US?

The irony is that several layers up the banking chain, the fat cats of the banking World are indeed sunning themselves on their 85' yachts thanks to yours and others creativity.

[Payscale]

If you cant afford the house dont buy it.
It not like the agent call the buyer to find a house.

The problem lies with the bank, but they are faceless, so its easier to blame the agent.

In the desert prices go up and down like the temperature, so dont buy for more the your live out allowance. The rest is your own risk and gain

[football1]

Thanks to all who have been in touch regarding mortgages in the UAE. We'd still like to here from people who have grievances with banks over mortgage repayments, exit fees and other issues relating to how interest rates are applied.

Homeowners caught in mortgage rate trap - The National (http://www.thenational.ae/business/banking/homeowners-caught-in-mortgage-rate-trap)

[BlueSkye]

Homeowners caught in mortgage rate trap - The National (http://www.thenational.ae/business/banking/homeowners-caught-in-mortgage-rate-trap)

I assume that the above mentioned article is the result of some of the OP's enquiries. I immediately fired off an email to HSBC asking when my reduced interest rate will take effect. Standing by with bated breath and giddy anticipation for their reply. :rolleyes:

[BYMONEK]

Football 1

For a so called journalist, I'm surprised that you don't know your 'here' from your 'hear'! You're not with the Daily Mail are you? ;)

[Left Coaster]

One small thing to consider (although I do sympathise) When we sign a mortgage with a lender, we agree to terms and conditions right? It's a contract between you and the bank to certain terms. It seems you guys want it both ways...change when it suits you, yet when someone else moves the goal posts on you with out due regard for a contract it's a b*tch fest here. Which is it then? What would you have your lender do? Throw out the agreement you signed with them? If it was me that lent you the money I'd have to think pretty hard before I changed anything. Setting that precedent isn't something any lender would easily make. Just sayin'...

[Payscale]

I signed for a flexible rate...not only bendable in one direction..

[Saltaire]

All rates are flexible in the UAE but as Payscale quite rightly pointed out, they seem to flex in only one direction!! Tamweel, Amlak, are among the worst offenders. DO NOT use these locals lending institutions if you have an option.

[Payscale]

Doesnt really matter. As far as I know HSBC and other international banks operated as separate entities in Dubai. ei HSBC in London cant pull an account statement for you...

[Wordsworth]

I have also been an HSBC mortgage customer in Dubai for almost 9 years. I was on a reasonable rate but a few months ago they advertised a lower rate for new customers so I complained and eventually got 5.4%. I shall be complaining again re this new 3.99% for new customers. I find it disgusting that this should be the case. As mentioned in the national 3 % is the fee to repay and transfer the mortgage early.

I would be keen to know if any existing HSBC customers are getting better deals?

Over and out.

[bigmountain]

I have a few mortgages set up .My mortgage rates have all gone down from the original except for Tamweel , In the sense that Tamweel went up and has come down , however not below the iniital rate offered . I have found Standard Chartered Banks process of obtaining a mortgage , the best. The consultant was knowledgeable and informative, visited my home to complete all the documentation , updated me at every point of the process and met most of the time time lines set . He was with me during the whole process at the land department , even paid my parking ticket . After the process the rate has dropped radically and is the lowest 4.85%. I have access to my account on line and I can instantly know what is my outstanding. The only negative point is that they offer only 75% of the value and if you want to take another mortgage , it goes down to 70 %

Tamweel unfortunately could have cornered the market, but they seem to have a totally oblique /bent /screwed thought process. They would rather chase new and unknown prospective borrowers ( who may or may not be a good client ) and punish the loyal , regular joe who has'nt missed an installment . I'm currently paying over 2.0% above what they are offering new home loans. Another thing about Tamweel is their Accounting seems to change every other year and it takes sometime to keep track on where all the money .
If you want to close you outstanding mortgage, they have the highest redemption charges . Currently they are offering new borrowers 0 redemption charges, pay for your property insurance and etc . It really gets you worked up. But its seems Tamweel and also some other Banks dont realize that taking out a Mortgage is a long term relationship, and should not be dependent of perks and tricks to entice the new borrower and then hang them out to dry.

[ByeByeDubai]

Be very wary of HSBC. Its a bad combination: 1. A bank that easily breaks its agreements with customers under the umbrella that they have the right to change terms and conditions (including any broad understanding when entering the loan agreement.) 2. A customer pool like pilots who are generally not that bright and, for the most part, too trusting and financially inept.

HSBC's tactics to date:

Previously advertised no early redemption fee - Advertised as "No Charge". Simply an "Account Closure Fee" of 2500 dhs. This is attached to early T&Cs applicable on entry to loan. Then a 10,000 dhm fee to move to another bank with the fee of 2500 dhs for closing account. They then Introduced a 3% early redemption fee along with account closure fee and ridiculous charges for the liability letter printed in 30 seconds off a computer.

Sold loans indicating interest would be tied to the Fed Funds Rates and would follow their movement. They changed that quickly as the FF rate dropped from 5.25% to almost 0.25% with the UAE Central Bank quickly following suit. They actually increased rates at one stage as Fed rates dropped. Had UAE banks followed the dropping rates, the collapse of the UAE property market would not have been so severe nor its repercussions. Bank profits came before national interests once again. There was a strong whiff of banking collusion here....

Sold loans as Flexi Loans where you could overpay in lump sums and use their "re-draw" facility on the overpayment portion later. They stopped the redraw option and locked in overpayments.

Had no minimum for lump sum overpayment. Later introduced a 25,000 dhs minimum lump sum repayment to prohibit a large section of customers from bringing down their principle balance.

Of course the one that most missed (only those using loan tracking software picked it up): HSBC Initially calculated interest of a 12 month year or 365 days as most normal mortgage lenders do. After all how else does one define Per Annum?

Now they charge interest based on a 360 day year. See initial T&C where a year or annual period was defined as 12 months. In 2009 a little change to Clause 6 of an updated T&C introduced calculation on a 360 day basis. This little software change in 2011 raked in millions of extra in mortage interest payments that most people didnt even notice. It has the effect of increasing the interest rate if compared to a 365 day (normal) mortgage. One must be greatful that they didnt define a year as 300 days I suppose. Maybe that is yet to come.

Currently

They do not allow regular overpayment.
Any lump sum overpayment results in them lowering the monthly payments but not the term so they can extract maximum interest and keep the ratio of prinicple to interest low and relatively constant. There is absolutely no reason a fixed monthly sum with some overpayment cannot be made to a mortgage. This is a fairly standard practice and shows the interest paid over the life can be vastly reduced by moderate overpayments. Clearly not in the bank's interest.
They do not lower interest rates despite the huge disparity amongst customers. The recent low "introductory" offers are now 3.99%. These will jump however - probably about 1 - 2 % making a big difference to those tight on mortgage repayments.

They advertise as regulated by the Jersey Financial Services Commission. Try phoning them to raise an issue....

I wont go into the complexities of how and when interest is calculated as that is a little complex. But rest assured it is done to your maximum disadvantage.

Public outcry is all that keeps banks in check. They dislike bad press. Sadly most are either too lazy or too stupid to know how to do this effectively and so the fleecing goes on.

Happy borrowing....

[Payscale]

BUYBUY.... SO MANY WORDS. THEY ARE SO DIFFIKULT TOO READ ASS I AM A NOT TOO BRIGHT AVIATOR. I WUNDER IF YOU COULD SENT IT AS A SOUND FILE...

Banks are the same all over. However here they are less regulated. The people that sell mortgages are usually not financially educated, and are chasing the commission.
Drive to any town and the biggest building is the banks. Banking is a fantastic business. Ever heard of fractional reserve banking?