Although our country has a relatively high proportion of home owners, many of whom have little or no debt on their property, development and marketing of home equity release products by the financial services industry has been a fairly recent phenomenon in Malta.
It was HSBC Bank Malta p.l.c., in fact, that in 1999 launched the Equity Release Loan, a packaged product combining attractive interest rates with long term borrowing for any purpose. Home Equity release loans are now available under the HSBC brand name Maxicredit, and come with a variable or a fixed interest rate option, and in Maltese Lira or euro.
Rising property prices are giving property owners a feeling of wealth and security, but by its very nature this wealth is locked up in the value of the property. Maxicredit is the key to unlock this wealth, enabling the owner to use the loan proceeds on practically anything.
Maxicredit is the ideal product to finance medium to high value expenditure, so the repayment may be spread over a long term. This may include anything from buying a luxury car to financing the purchase of property abroad. Professional persons may use it to buy and equip an office or clinic.
What are the main advantages of Maxicredit? First of all, there is the interest rate. Since the product is considered a personal and not a commercial facility, the interest rates on offer are much lower than a normal commercial facility.
Secondly, there is the maximum repayment term of twenty years. This gives customers the opportunity to spread repayments over a much longer term than is available on a normal personal loan. Thirdly, customers may borrow up to eighty per cent of the value of the property but this limit must include any other liabilities that are secured by a charge on the same property.
Maxicredit loans are subject to the same affordability criteria that apply on normal homes, and of course it is not our intention to encourage customers to overstretch their financial resources or to put their home at risk by borrowing more than they can afford to repay.
Maxicredit customers are offered a full financial review which may include life and critical illness protection, investment management and retirement planning. They may also make use of our competitively priced life and Home Loan Credit Insurance policies. The latter insures the borrower against accident, sickness and involuntary unemployment during the term of the loan.
Customers may use either their main residence or their summer residence as security for a Maxicredit. This product is intended for Maltese nationals and EU citizens living and working in Malta. Loans are subject to final approval by an HSBC branch.
Further details on HSBC’s Maxicredit are available from the website www.hsbc.com.mt and by calling Customer Service on 2380 2380 or from any HSBC branch in Malta and Gozo.
Speranza Catania, Head of Consumer Finance, HSBC Bank Malta