First Direct resumes mortgage offers

LONDON (Reuters) - First Direct, the online and telephone lender owned by HSBC, will resume offering mortgages to borrowers on Monday after withdrawing from the market six weeks ago due to rocketing demand.

First Direct said it had cleared a backlog of mortgage application approvals that had forced it to suspend its offer to people without existing accounts at the bank on April 1.

It said at that time demand had surged after rivals raised their mortgage rates or withdrew offers due to the credit crunch. Its 2-year fixed rate of 4.95 percent had been one of the best on offer to homeowners.

The lender, which said it had completed a year's worth of mortgages in the past three months, will offer a 2-year fixed rate of 5.76 percent plus fees.

It requires at least a 20 percent deposit on home loans.

HSBC has an underweight position in UK mortgages and, including First Direct, usually takes about 3.6 percent of the market, but that share has jumped this year.