HSBC passes on rate cut ? commercial mortgages

06 February 2009

HSBC has revealed that the "vast majority" of its small and medium-sized enterprise (SME) customers will benefit from this week's Bank of England base rate cut.

It could offer a boost to firms with commercial mortgages, particularly those on tracker products.

The bank stated that businesses on floating rates – which account for approximately 97 per cent of HSBC's SME borrowers – will have the full reduction of 0.5 per cent passed on.

Head of retail products for the company Andy Mielczarek said that the amount it will lend out to SMEs has been increased by £1 billion.

He added: "HSBC is very much open for business, we have £15 billion allocated for mortgage lending in 2009 and we will be passing on the full base rate decrease to the vast majority of our customers."

Meanwhile Barbara-Ann King, head of proposition at Barclays Stockbrokers, has claimed that the rate cut will help to boost confidence in financial markets and aid economic recovery.