HSBC denies mortgage rate rise after customers receive interest rate change letters

HSBC Malta says it has made no decision to increase mortgage interest rates, despite some customers receiving letters headed “A change to your interest rate” advising them that a revision to their rate had been introduced.

The letters were sent days after the European Central Bank announced an interest rate increase. While the timing raised questions about whether mortgage repayments would rise, it does not establish a connection between the ECB decision and HSBC’s correspondence.

Responding to The Shift, the bank said: “HSBC Malta confirms that no decisions have been made to increase its mortgage interest rates.”

HSBC described suggestions to the contrary as factually inaccurate.

The correspondence relayed to The Shift described an annual borrowing rate of 0.50 percentage points above HSBC’s Home Loan Base Rate of 2.25%, giving a total rate of 2.75%.

These figures explain how the customer’s interest rate is calculated: the bank’s benchmark plus an additional margin. They do not, by themselves, establish whether the borrower will pay more than before.

HSBC’s response has not yet explained why the correspondence referred to a change or what revision had been introduced.

Individual mortgage rates can change without a bank announcing a general increase, such as when an introductory fixed-rate period expires. There is no confirmation that this explains the letters concerned.

Meanwhile, following the ECB’s announcement, Bank of Valletta has confirmed that its home-loan base rate will remain at 2.15% through December, following its quarterly review.

Its business lending base rate will also stay at 2.15%, while its personal lending base rate remains at 2.45%.

BOV cited its strong financial position, customers’ interests, the economic outlook and competitiveness as reasons for maintaining stability.

Its home-loan base rate is not necessarily the final rate borrowers pay. Individual agreements may include an additional margin, meaning the benchmark cannot be compared directly with HSBC’s quoted total rate of 2.75%.

BOV will review its rates again in December and says it will continue monitoring ECB decisions, market expectations and geopolitical pressures.