Calling HSBC mortgage holders in UAE
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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.
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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...
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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.
I would be keen to know if any existing HSBC customers are getting better deals?
Over and out.
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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.
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.
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The Record to Date
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....
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....
Last edited by ByeByeDubai; 12th Jun 2012 at 07:52.
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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?
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?
