ONE of the country's biggest banks is offering some hope to beleaguered homeowners.

HSBC has gone against the squeeze in the mortgage market by offering to match existing fixed-rate deals.

The move comes as many borrowers find they cannot switch their new home loan because banks are reining in lending during the current credit crisis.

HSBC, which has 3% of the market, will look to match homeowners' existing fixed-rate deals - including rates as low as 4.54% - for a further two years.

The offer, which starts on Monday for a limited period, is subject to restrictions and a fee, while borrowing will be limited to 80% of the value of the property. In line with all HSBC's mortgages, the product will not be available through brokers.

The lender, which funds the vast majority of its mortgages through retail deposits, is said to be gearing up to cope with three times its current level of business.

Joe Garner, HSBC's head of UK personal financial services, said: "We're in an incredibly strong position while others are stepping back. We remain competitive and are selective about the right sort of business."

Analyst Alex Potter said HSBC's deals could be two percentage points below its peers.

He added: "HSBC has a surplus of funding, predominantly due to its Far-Eastern businesses which are extremely liquid, but also due to its relatively modest market share in UK mortgages.

"HSBC does not have to use currently expensive wholesale funding and is clearly now set to aggressively deploy its strong deposit-gathering franchise."

Mr Potter said a loan-to-value ratio of 80% meant HSBC was unlikely to change its normally risk-averse outlook.

However, he said the offer would put some momentum behind its UK mortgage business and improve its longer-term market position.

"Banks without such funding benefits and with large refinancing events due this year are likely to be market share losers due to this move," he said.

"The prime candidates for share loss should be Halifax Bank of Scotland, Alliance & Leicester as well as Nationwide and Northern Rock."

The size of HSBC's fee will depend on the interest rate and size of loan requested, but the bank said it estimated almost 75% of customers will pay £999 or less.

Earlier this week, it was revealed Scotland and Greater London are the only areas of the UK that didn't experience a downturn in prices the last quarter.