HSBC Home Loans
HSBC is among the leading financial institutions in the world and has its presence in over 71 countries catering to over 47 Million customers worldwide. The bank has had its presence in UAE since 1946 and began its regional expansion in the early 1960’s. Since then HSBC has grown to cater to a whole variety of customers and have started specialising in personal banking, commercial banking and wealth management. The bank operates over 6000 offices and through their efficient delivery channel provides a range of comprehensive banking products.
You’re probably eligible for HSBC Home Loan if you are
At least 21 years old
Less than 65 years old
Salaried / Self-employed
with regular income
Earn more than the minimum income required
Your HSBC Home Loan amount eligibility is based on these factors
Loan capped is AED 20 million
EMIs of other loans lower your eligibility
Increase your eligible HSBC Home Loan amount by these steps
Make your spouse a co-applicant, and her income will add to your eligibility
Choose longer tenure loan up to 25 years
Alternatively add your parents
HSBC Home Loan Interest RatesUpdated on 05 Dec 2016
|UAE Resident HSBC Premier Customer||Rate1|
|Home Loan Amount of AED 5 Million or more|
|New Home Purchase, Balance Transfer, Balance Transfer with Top Up||3.24% p.a.|
|Home Loan Top Up and Equity Release Loan||3.75% p.a.|
|Home Loan Amount less than AED 5 Million|
|New Home Purchase, Balance Transfer, Balance Transfer with Top Up||3.75% p.a.|
|Home Loan Top Up and Equity Release Loan||4.49% p.a.|
|UAE HSBC Advance, Personal Banking and Non Resident Customers||Rate1|
|New Home Purchase, Balance Transfer, Balance Transfer with Top Up||4.49% p.a.|
|Home Loan Top Up and Equity Release Loan||4.99% p.a.|
One of the more popular products offered by HSBC is their Home Loans. Home loans are an effective way of securing finances for the purchase of a home. Owning a home is also a statement. It is the reflection of the hard work and success of a person and since owning a home doesn’t come easy, home loans are the prime way to secure additional finances required. The HSBC home loans offer rates starting from 3.24% per annum. The features and benefits if the HSBC home loans are as follows.
Types of HSBC Home Loans
- New Home Loan
- Top-up Loan
- Balance Transfer
New Home Loans
Owning a new home is a long term goal for many and more often than not many people don’t have the required finances to purchase a property all in one go. Home loans are an apt way of financing a home and provides the benefit of longer tenures for repayment making cash flow management easier. The features if the HSBC New Home Loan are as follows:
- The loan is approved in principle in 48 hours and will be disbursed upon successful submission of required documents.
- The loan has a reducing rate of 3.24% p.a. applicable to the UAE resident premier customers that are a borrowing an amount in excess of AED 5 Million. The interest of the loan is calculated on the daily outstanding balance of the loan based on the AED EIBOR rates which are updated every quarter.
- The loan offers free overpayments of up to 25% of the outstanding amount per calendar year allowing for faster repayment without incurring overpayment charges.
- Repayment does not require a mandatory salary transfer.
- The aspiring candidate can expect a call back within 30 minutes provided the application has been made between 8:30 AM to 4:30 PM from Sundays to Thursdays.
- The minimum home loan amount is AED 3 Million.
Top Up Loans
Top up loans are ideal for anyone who’s considering carrying out a remodel or renovation of their home. The top up loan is when the existing home loan is topped with additional funding and offers an attractive interest rate starting from 3.75% p.a. The features of the Top up Loan are as follows:
- Applicants who want to avail a top up loan can have it approved in principle within 48 hours.
- The loan does not require a mandatory salary transfer.
- The applicants can have any mortgage related queries answered by a dedicated team of mortgage advisors available on the helpline at 800 46873 (HOUSE).
- The top up loan does not charge an early settlement fee for the first three years and allows for free overpayments of up to 25% of the outstanding balance per calendar year.
- Percentage of top up eligibility is dependent on the time elapsed of the current home loan and applicants can avail a top up of 5% of the property value if the time elapsed on their home loan is between 13 months to 24 months, a top up of 15% of the property value if the time elapsed on their home loan is between 25 months to 36 months, a top up of 40% of the property value if the time elapsed on their home loan is between 37 months to 48 months and a top up of up to 75% of the first property value if time elapsed on the home loan is greater than 49 months.
- The top up loan attracts a fee which is the lower of 1% of the outstanding amount or AED 10,000 for the first three years.
The balance transfer is for switching an existing home loan to that of HSBC and allowing the borrowers to enjoy lower interest rates. The features of the balance transfer are as follows:
- The loan will be approved in principle within 48 hours from application.
- The loan repayment requires no mandatory salary transfer from the borrower.
- The loan offers lower interest rates starting from 3.24% per annum which is a reducing rate offered to UAE residents and premier customers who avail an amount greater than AED 3 Million.
- The balance transfer levies a charge of 1% of the outstanding loan amount or AED 10,000 whichever is lower for the first three years of the loan.
Interest Rates for HSBC Home Loans
The table below shows the interest rates for the HSBC home loans
|Type of Charge||New Home Loans||Balance Transfer||Top Up|
|Rate for Amounts of AED 5 Million or more for UAE Resident HSBC Premier Customer for new home purchase, balance transfer or balance transfer with top up||3.24% p.a.||3.24% p.a.||3.24% p.a.|
|Rate for Amounts of AED 5 Million or more for UAE Resident HSBC Premier Customer for home loan top up and equity release loan||3.75% p.a.||3.75% p.a.||3.75% p.a.|
|Rate for Amounts of less than AED 5 Million for UAE Resident HSBC Premier Customer for new home purchase, balance transfer or balance transfer with top up||3.75% p.a.||3.75% p.a.||3.75% p.a.|
|Rate for Amounts of less than AED 5 Million or more for UAE Resident HSBC Premier Customer for home loan top up and equity release loan||4.49% p.a.||4.49% p.a.||4.49% p.a.|
|Rate for home loans for UAE HSBC Advance, personal banking and non-resident customers for new home purchase, balance transfer or balance transfer with top up||4.49% p.a.||4.49% p.a.||4.49% p.a.|
|Rate for home loans for UAE HSBC Advance, personal banking and non-resident customers for home loan top up and equity release loan||4.99% p.a.||4.99% p.a.||4.99% p.a.|
Eligibility Criteria for HSBC Home Loans
- The minimum age of the applicant must be at least 21 years as at last birthday.
- The maximum age of the applicant cannot exceed 65 years if they are salaried and cannot exceed 70 years if they are self-employed or are UAE Nationals.
- The loan can be availed by Salaried applicants or Self-Employed applicants.
- Only HSBC Premier Customers who are non-residents can apply for the loan. Other non-resident applicants cannot avail the home loan.
- The applicant needs to earn a minimum monthly income of AED 15,000 per month.
- Base interest rate for completed properties
- Loan to Value (LTV) less than or equal to 60% - 3 month EIBOR plus 3.27857% p.a.
- LTV over 60% and up to the maximum LTV applicable on a customer's choice of property - 3 month EIBOR plus 3.77857% p.a.
- Equity Release Loan
For an amount up to a maximum of AED 5 million an additional 1% interest is charged over and above the applicable home purchase rate.
Life and property insurance is mandatory and hence a property insurance fee is assigned to the bank at the rate of 0.04% p.a. which is to be paid and reviewed annually by the customer. Customers can arrange for their own insurance through a recognised insurance provider or take the life and property insurance as arranged by HSBC.
Home Loan Administration Fees
In personal banking, an administration fee of 1% of the loan amount, on a minimum of AED 5,000, is to be paid at the time of approval of the loan, towards documentation and processing of the loan and miscellaneous expenses that could arise. For Premier clients, a fee of 0.5% of loan amount is to be paid on a minimum of AED 5,000.
Home Loans Early Settlement Charge
An early settlement charge of 1% on the amount of the loan outstanding or AED 10,000 - whichever is less, is applied on premises such as - sale of property, settlement of loan from individual funds and transfer of loan to another lender. This charge is applicable only during the first 3 years of the repayment period.
Property Valuation Fee
A valuation fee of AED2500 is to be paid to the valuer in case a standard valuation is required. Valuation is to be submitted at the time of application of loan for all completed properties and is non-refundable even if the loan application is unsuccessful.
Other Miscellaneous Fees/Charges:
- There is zero overpayment fee if the minimum overpayment amount is AED 25,000 over and above the usual monthly instalment.
- A product conversion fee of AED 10,000 is charged when there is a need for conversion from a Standard Variable Rate home loan to a 3-month EIBOR based loan.
- For copies of original documentation and/or non-standard statement production, a fee of AED 500 is levied by the bank, per document.
- In order to get a home loan liability letter, a fee of AED 1000 is charged per letter
- AED 500 is charged on re-issuance of offer due to change of parties on the mortgage offer letter
- Loan rescheduling fee is AED 1000, Property swap administration fee is AED 2,500 and for Issuance of No Objection Certificate AED 1,000 is charged by the Bank.
This loan application form has 2 applicants. So, if there are two applicants, details for both have to be filled for both the applicants wherever necessary. Here are details and process to fill up the application form for HSBC residential home loan:
- Personal Details: this includes mainly information on the identity and background of the individual. Make sure that all the details that furnished are at par with the documents that you are providing along with the application form. Reference and mortgage advisor are to be filled only whenever necessary.
- Residential Details: HSBC UAE requires people to ensure that they furnish the details of their residence, other residences and their original residence in their home country if applicable. This is also essential for checking your background along with the contact details.
- Employment Details: Here you have to specify your job role, designation, company details and other essential details about yourself. It also includes details such as details of companies you have worked prior to, before joining your current place of employment.
- Income: This needs to be filled with reference to the documents to support the same. Also, if you have other sources of income such as rent from property, etc, it has to written here.
- Assets: This will include all the Savings, Shares, Assets, Policies and Bonds that you own under the state jurisdiction and currency, only.
- Monthly Expenditure: This needs to be filled in approximation for some of the sections such as entertainment. But it should give a clear idea about your savings. This will eventually help HSBC UAE to decide whether you are actually eligible for the loan or not based on your monthly expenditure. So fill this section wisely.
- New Home Loans Details: This will detail the sort of product as in the housing loan, the amount you wish to borrow, etc.
- Details of your new property: This section is pretty self-explanatory but it is essential that all details are accurate and supported by documents..
- The Property Seller: Details about the property owner have to be filled in along with his or her contact details.
- The Insurance: Here you specify whether you wish to attain the home insurance product from HSBC or get your own policy from a different bank and further details on the same.
- Valuations: Personal contact details have to be given for the person, who will help in validation of the valuation of the property, with the loan amount required or requested.
- Additional Information: This includes details about your HSBC bank account, since it is necessary to have a bank account with HSBC for the housing loan.
- Additional Comments: Here any additional information can be written.
- Declaration: Signatures are to be given here. However, note to read and understand the declaration text before signing it. Contact HSBC if uncertain about the declaration before signing it and submitting the form along with the documentation.
HSBC is a leading provider of commercial, retail and investment banking solutions in the UAE. It serves around 52 million customers through four global businesses: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. HSBC is a global player with a wide ranging network in countries and territories in Europe, Asia- Pacific, The Middle East and Africa, North America and Latin America.
HSBC's presence is UAE dates back to 1946 when it was known as the British Bank of Iran and the Middle East (BBME). Gradually in 1959, BBME was taken over by The Hong Kong and Shanghai Banking Corporation, and the bank moved on to become a key element in establishing a banking sector across the MENA region.
Listed below are the products and services offered by HSBC Middle East Ltd.
Accounts- The bank offers accounts to help customers manage their money better. Current account, Savings account and term account are some of the products offered by the bank under the account category.
Loans and Mortgages-The bank offers specialised loans and mortgages to its customers tailor made to suit the financial/credit needs of its customers. The bank offers car loans and personal loans along with secured and unsecured overdrafts.
Cards-The bank offers a wide range of credit cards and debit cards, each with its own benefits and special offers. The bank offers a very attractive rewards programme on its credit cards.
Insurance-The bank offers general insurance products like: car insurance, home insurance and travel insurance, and life insurance to the customers in UAE to ensure that they stay protected in case of unfortunate incidents.
Investment-The bank offers investment solutions such as mutual funds to aid the customer in building on their wealth the safe way.
Transfers- Customers can handle money transfer with the variety of transfer options provided by the bank.
What does the HSBC Home Loan provide?
It provides the opportunity for customers, both national and expatriate, to borrow money for the purchase of selected residential properties in developments in the Emirates of Abu Dhabi and Dubai. The home loan will be secured against the property.
Do I have to have an HSBC bank account to apply for an HSBC Home Loan?
Yes. However you can apply without being a current HSBC customer and we will arrange an appropriate account for you if you are approved for a home loan.
Who is eligible for a HSBC Home Loan?
Customers earning an income of AED 15,000 per month and above (or equivalent in other currencies), who wish to purchase a property from one of the selected developments for which HSBC is providing finance, subject to meeting HSBC's lending criteria.
What are the principal features of HSBC Home Loan?
– EIBOR home loans are based on the three-month EIBOR, subject to quarterly review, and a fixed margin that remains fixed for the life of the loan
– Maximum term of 25 years (subject to applicable regulations)
– Finance amount of up to 75% of the purchase price or the professional valuation, whichever is lower.
What are the advantages of HSBC Home Loan?
We offer competitive home loan rates with no financial penalties if you repay the loan in full before the end of the Repayment Period after the first 3 years (administrative charges will apply for loan closure).You can also overpay throughout the term of the home loan (subject to minimum and maximum overpayment requirements) see our Schedule of Tariffs for further details. A dedicated team of experienced mortgage advisers will assist you to arrange your home loan. Following your purchase further assistance is available by calling at 800 HOUSE.
How is interest for HSBC Home Loan calculated?
Interest is calculated on the daily principal balance outstanding on your home loan account. Your monthly installment will be applied against your outstanding balance, plus the interest accrued.
How do I apply for HSBC Home Loan?
To apply for an HSBC Home Loan you can call toll–free 800 HOUSE, visit your nearest branch or the HSBC website.
You can discuss your needs with a member of the HSBC Home Loan team, who will conduct an initial fact-find interview to ensure that you have a full picture of what is required.
What happens if I sell the house before the home loan is paid off?
We will require you to repay the full outstanding balance of your home loan (principal plus interest) owing up to the time of sale, whereupon we will release our security over the property. Please call toll free 800 HOUSE or visit a branch for further details.
Can I arrange my own insurance?
Yes. Customers can take life insurance and property insurance arranged by HSBC or provide their own cover through an accepted insurance provider and assign the benefit of the policy to HSBC. If a customer makes their own insurance arrangements there may be a cost involved in the assignment of the policies and the borrower must pay these costs. Life insurance and property insurance (for villas and townhouses) are both mandatory.
What is the mortgage part-payment procedure?
You can make an overpayment at any time. This should be a minimum of AED 25,000 on top of your usual monthly installment. The bank will not charge a fee for overpayments. Such additional payments can only be made on your usual monthly installment date.
Overpayments must not total more than 25% of the total outstanding loan amount in any calendar year.
– If you wish to make an overpayment please notify the bank in writing
– Please note that you will not be able to redraw any overpayments made. The bank must not normally reverse or cancel any overpayment instructions.
– You can choose to make the part payment by using your online banking account or by signing a debit authority for the bank to facilitate the payment.
– Please note that following the overpayment your loan tenure will remain the same, however your monthly installment amount will reduce.
– Existing Amanah mortgage customers looking to make overpayments will need to sign a letter in addition to the above.
The main factor while taking a home loan is the interest rate. Home loans are easily available from various banks across the UAE and the interest rate that is applicable on these loans depends on the bank that offers that loan. It is the rate of interest on the Home Loan that affects the EMI and hence your monthly budget throughout the tenure of the loan.
Buying a property for the first time in your life and that too on mortgage? It is a huge expense and a massive commitment to get involved with. Hence there are certain things you will need to know about it before you can proceed.
Ever felt like changing your lender? There are lots of things that make refinancing a mortgage a good idea and the chief among them is that if can help ease the pressure of monthly payments. You can also walk away with lots of benefits, depending on the bank.
Did you know that you can avail finance by tapping into the positive equity of your property? Instead of letting your property to sit idle, you may use it to avail finances. Many banks provide cash advances against properties for a lower rate of interest. Using properties as a collateral will help get cash advances of a higher amount at a very low rate.
Buy-to-let mortgages are best suited for the people who want to make an investment in the property with just the intention of letting out the property for rent. But since their purpose differs much from the regular mortgages, so does their other attributes. Hence it requires a well informed decision before opting for it.
Home Equity Loans provide the facility for homeowners to borrow funds by putting up the equity in their homes as leverage. Home Equity Loans or Second Mortgages are among the easiest sources of cash a customer could wish for. And these being tax deductible, offer an additional benefit.
Home Refinance Loans provide an option to the customers to opt for an additional finance on the existing property so as to get a better term and rate of interest than offered by their current mortgage. The second mortgage can be taken out once the first has been repaid.
Subprime Mortgages provides mortgages for the acquisition of residential real estate, sanctioned to customers with a bad credit history. Hence the risk of default on these loans is significantly higher and so are the fees to make up for the extra risk.
Reverse Mortgages are a special kind of mortgages targeted only at the customers who have crossed the age of 62 years. The banks or the lenders provide the money against the equity in the existing property and also do provide for the payments to be made either monthly or occasionally in lump sums.
Interest only Mortgage in the UAE provide the facility to the customer to pay off the interest on the mortgage before the principal amount. Interest only mortgages come with a fixed term and have so many benefits apart from low initial payments and are suggested for the customers who intend to sell the property after the end of the mortgage.
Fixed Rate Mortgages offer finance at fixed rates throughout the loan tenor and hence the monthly payments due on fixed-rate mortgages also remain the same. They are the exact opposite of adjustable rate mortgages in which the monthly payments may be low during the initial stages of the mortgage but could potentially increase to almost double the initial interest rates which will increase the monthly payments.
News about HSBC Home Loan in the UAE
HSBC Bank reports 14% down in its Net profit
HSBC Bank in the Middle East witnesses a 14% drop in its net profit acquired in the 1st quarter of 2016. It is caused by the tumble faced by the bank's investment banking department in the global market. In the first quarter of 2016, HSBC Bank reports a pre-tax profit of $6.1 billion which is lower than the amount it received in 2015. The bank received $7.1bn in 2015 for the same quarter.
09th May 2016
HSBC Cut Jobs in Retail and Commercial Banking Units in UAE in Response to Slower Economic Growth
With lower income from the oil sector and overall slowdown in the economy, HSBC in UAE has cut around 150 jobs. Most job cuts were witnessed in the retail and commercial banking units of the Bank.
A spokeswoman from HSBC confirmed these job cuts and stated that they were in response to the targeted reduction in costs that were set for the end of 2017. She however declined to comment on the actual size of the job cuts expected but said that it was part of the continual headcount management.
HSBC, which has been in operations in Dubai since 1946 employs more than 8000 full time employees in Middle East and North Africa is downsizing on staff as the banking industry is faced with loan defaults from the SME sector which are expected to hit the Dh 7 Billion mark and the crunch in liquidity. HSBC plans on cutting 50,000 jobs globally which would bring about a savings of $ 5 Billion within a span of 2 years.
24th November 2015