HSBC home loan transfer: What is changing for Australian customers?
Last checked and updated: 5 November 2026
Important information
This article explains the proposed HSBC home loan transfer in Australia, including the timing, loan arrangements, offset changes and customer protections. It summarises official information published by HSBC Australia, HSBC Holdings, Pepper Money and the Australian Prudential Regulation Authority as at 5 November 2026.
HSBC's latest customer notices specifically dealing with the home loan transfer are dated 20 October 2026. HSBC subsequently confirmed in its 27 October 2026 financial results that the transaction has received competition approval but remains subject to other regulatory approval.
The proposed transfer has not yet been completed, and the confirmed transfer date has not been announced. The timing, arrangements and available account features may change as further information is released.
This article provides factual general information only. It does not assess whether a customer should retain, repay or refinance a loan and does not constitute personal financial, credit, legal or taxation advice.
HSBC home loan transfer at a glance
HSBC Australia has agreed to sell its approximately AUD36 billion Australian home loan and personal loan portfolio to Virgo BidCo Pty Ltd, an entity owned by funds managed by affiliates of Blackstone.
Pepper Money will not be the purchaser of the loan portfolio. Pepper Money has been appointed to manage and service the loans after the sale is completed.
The transaction has received competition approval but remains subject to other regulatory approval. Completion is expected during the first half of 2027.
Until the transfer occurs, HSBC will continue to own, manage and service the loans. Customers do not need to take any action at this stage unless HSBC contacts them with specific instructions.
What has HSBC announced?
On 31 July 2026, HSBC announced that it would close its Australian retail banking business following a strategic review.
As part of that process, HSBC entered into an agreement to sell its Australian home loan and personal loan portfolio, including personal credit line accounts, to an entity owned by Blackstone-managed funds.
The sale does not mean that HSBC is leaving Australia entirely. HSBC has said that it will continue operating its Corporate and Institutional Banking, Private Banking and Asset Management businesses in Australia. The remainder of its Australian retail banking business will be wound down in stages.
Who are Blackstone and Pepper Money?
Blackstone-managed funds are financing and acquiring the loan portfolio through the purchaser, Virgo BidCo Pty Ltd.
Pepper Money has been appointed as the loan servicer and manager. Servicing includes:
Managing repayments.
Answering account enquiries.
Issuing statements.
Processing loan changes.
Managing hardship requests.
Providing online account access.
Providing ongoing customer support.
After the transfer, Pepper Money will become the main point of contact for customers regarding their home loans.
When will the transfer occur?
The transfer is expected to occur during the first half of 2027.
The transaction has received competition approval but remains subject to other regulatory approval. A confirmed transfer date has not yet been announced.
Before the transfer, HSBC will provide customers with further written information, including:
The expected transfer date.
Any actions required before the transfer.
Information about account access.
Instructions relating to offset balances.
Details of any replacement debit cards or repayment arrangements.
After the transfer, Pepper Money is expected to send customers a welcome pack explaining how to access and manage their loans.
What do customers need to do now?
There is no immediate action required.
HSBC will continue to manage existing home loans until the transfer occurs. Current repayments, account access and loan arrangements will continue under the existing terms and conditions during this period.
Customers should read future communications from HSBC carefully because some customers may need to provide instructions or consent before particular features or balances can be transferred.
Will interest rates change because of the transfer?
HSBC and Pepper Money have stated that a customer's interest rate will not change solely because the loan is being transferred.
The following will carry across at the time of transfer:
The applicable interest rate.
Existing interest rate discounts.
Loan fees.
Repayment arrangements.
Existing package discounts.
Customers will not automatically be moved onto one of Pepper Money's existing loan products or switched to one of Pepper Money's advertised interest rates.
This does not mean that an interest rate can never change. Variable rates may still change in accordance with the existing loan agreement, including following Reserve Bank of Australia cash rate changes or other pricing changes permitted under the loan terms. Changes after the transfer may also be made in accordance with the transferred loan agreement.
Will loan terms and conditions change?
HSBC has advised that some terms and conditions will need to be updated as part of the transfer to reflect regulatory requirements and differences in Pepper Money's processes. Customers will be notified ahead of any changes.
The statement that rates, fees, discounts and repayments will carry across does not mean that every term or account-access process will remain identical.
Will there be a transfer fee?
HSBC and Pepper Money have stated that customers will not be charged a fee simply because their loan is being transferred.
What happens to fixed-rate loans?
Existing fixed-rate loans will continue under their current fixed-rate contracts.
The following will transfer with the loan:
The fixed interest rate.
The current repayment arrangements.
The fixed-rate expiry date.
The applicable loan terms.
Pepper Money has stated that, when the fixed-rate period expires, the loan will move to a standard variable reference rate that is separate from Pepper Money's standard variable reference rate. Any HSBC product margin discount recorded in the customer's Letter of Offer or Letter of Variation will continue to apply.
What happens to interest-only loans?
Existing interest-only arrangements will continue in accordance with the current loan terms.
Any future request to extend an interest-only period will be subject to eligibility requirements and a credit assessment.
What happens to HSBC Home Loan Package benefits?
HSBC has stated that existing HSBC Home Loan Package benefits will continue under the existing arrangements following the transfer.
Premier customers who currently receive a 50% discount on their HSBC Home Loan Package annual fee will continue to receive that discount after the transfer.
How will customers manage their loans after the transfer?
After the transfer, customers will access and manage their loans through Pepper Money rather than HSBC.
Pepper Money has stated that online and mobile account access will continue to be available, subject to consent and the features available for the relevant loan. Customers will receive further information about the new access arrangements around the transfer.
Pepper Money has also stated that it will issue home loan statements half-yearly from the transfer date and will be able to assist customers with access to historical statements.
Will direct debits and repayments continue?
There is no immediate change to existing direct debits or repayment arrangements.
HSBC and Pepper Money have said they are working to make the transfer as seamless as possible. Customers will receive more information about repayment arrangements closer to the transfer.
Will customers receive a new debit card?
Customers can continue using an existing HSBC debit card linked to their home loan until the transfer.
Pepper Money has stated that customers with eligible facilities will receive a replacement Pepper Money debit card after the transfer. Further instructions will be provided closer to the transfer date.
What happens to redraw?
If redraw is currently available on an eligible Australian dollar home loan, it is expected to remain available after the transfer, subject to the transferred loan terms and Pepper Money's requirements.
HSBC has advised that customers and all other parties to the loan will need to accept Pepper Money's terms and conditions to activate redraw after the transfer. Pepper Money will contact customers with the information required. Eligibility requirements may also apply.
Customers with non-Australian dollar loans are expected to retain online account access, but HSBC has stated that redraw will not be available on those loans after the transfer.
The main structural change: offset accounts
The most significant product change for many home loan customers concerns the offset account.
Current HSBC offset account
An HSBC offset account is a separate deposit account held with a bank and linked to the home loan.
The balance in the account reduces the portion of the home loan on which interest is calculated. The offset balance does not reduce the customer's minimum contractual repayment.
Pepper Money offset sub-account
Pepper Money is a non-bank lender and does not accept customer deposits in the same way as a bank.
Pepper Money's offset facility will therefore be structured as a sub-account or separate split within the home loan. It will not be a separate bank transaction or deposit account.
Pepper Money states that the sub-account balance will reduce the portion of the home loan on which interest is calculated in a similar way to the current HSBC offset account. It will not reduce the minimum contractual repayment.
Will the HSBC offset balance transfer automatically?
No.
Before any HSBC offset balance is moved to a Pepper Money offset sub-account, HSBC will provide further information and ask the customer for consent.
Transferring the balance will be optional and will only occur with the customer's authority.
HSBC and Pepper Money have not yet published the complete process that will apply where a customer does not provide authority by the required date. Further details will be issued before the transfer.
How will customers access money in the Pepper Money offset sub-account?
Pepper Money has stated that access will be available, subject to the applicable account terms, through facilities including:
An optional debit card.
Online and mobile transactions.
BPAY.
Direct debits.
Real-time payments.
Telephone self-service.
HSBC branch access will not be available through the Pepper Money offset sub-account.
How does the Financial Claims Scheme apply?
The Australian Government's Financial Claims Scheme applies to eligible Australian dollar deposits held with Australian authorised deposit-taking institutions.
Eligible deposits are protected up to a total limit of AUD250,000 per account holder, per authorised deposit-taking institution. Separate mortgage offset deposit accounts can be covered by the scheme.
The current HSBC offset account is a separate bank deposit account and may qualify for Financial Claims Scheme protection, subject to the scheme's rules and the customer's total eligible deposits with HSBC.
Pepper Money is not an authorised deposit-taking institution. Its offset sub-account will be part of the loan structure rather than a separate deposit account. The Financial Claims Scheme will therefore not apply to money held in the Pepper Money offset sub-account.
What happens to the offset balance if a non-bank lender fails?
HSBC and Pepper Money state that, if the non-bank lender were to fail, the amount held in the offset sub-account would be set off against the outstanding home loan balance.
This means the amount in the sub-account would reduce the amount owed under the home loan rather than being treated as a separate bank deposit.
The offset sub-account is not designed to hold more money than the outstanding home loan balance.
What is the position for investment loans?
HSBC and Pepper Money state that the offset sub-account is intended to continue providing an interest-offset benefit for customers using their loans for investment purposes.
They also state that this information is general only and that the taxation treatment of a loan, interest, repayments, redraws and offset balances depends on the customer's individual circumstances.
The final taxation treatment is not determined by HSBC or Pepper Money and should not be assumed solely from the way the product is described.
How will consumer credit protections apply?
Both HSBC and Pepper Money are Australian credit licensees.
The transferred home loans will remain subject to applicable Australian consumer credit laws, including the National Credit Code. ASIC oversight of lending conduct will continue.
Customers will continue to have access to:
Internal complaints handling.
Financial hardship assistance.
Privacy protections.
The Australian Financial Complaints Authority for external dispute resolution.
Pepper Money has stated that existing financial hardship and payment arrangements made with HSBC will continue to be honoured after the transfer.
How is Pepper Money regulated differently from HSBC?
HSBC is a bank and an authorised deposit-taking institution supervised by APRA.
Pepper Money is a non-bank lender. It is not an authorised deposit-taking institution, does not accept traditional customer deposits and is not supervised by APRA in the same way as a bank.
Pepper Money remains regulated for its consumer lending conduct and must comply with applicable Australian consumer credit laws.
Will the same industry codes apply?
No.
HSBC subscribes to the Banking Code of Practice. Pepper Money subscribes to the Australian Finance Industry Association Finance Industry Code of Practice.
HSBC's consumer protections guide states that the Banking Code has been approved by ASIC. The AFIA Finance Industry Code has not been approved by ASIC and may not be contractually enforceable. It is monitored by an independent code compliance committee.
Both codes establish standards dealing with matters such as customer communication, fair treatment, hardship and support, but they are separate codes with different legal and compliance arrangements.
Will the ePayments Code continue to apply?
HSBC is a subscriber to the ePayments Code.
Pepper Money is not currently a subscriber to the ePayments Code. Pepper Money has stated that unauthorised transactions, mistaken payments and related issues will instead be addressed under its terms and conditions and investigation and complaints processes. Visa chargeback rights may also be available where applicable.
What happens to existing applications and approvals?
In its home loan FAQ dated 20 October 2026, HSBC states that submitted home loan applications will continue to be reviewed under its normal policies and processes.
That FAQ says valid pre-approvals, conditional approvals and unconditional approvals will continue to be honoured, subject to HSBC's lending criteria and the applicable expiry dates. Customers with an application in progress should confirm its current status directly with HSBC.
HSBC is no longer accepting new home loan applications.
What happens to loan variations?
Existing loan variations will continue to be processed by HSBC before the transfer.
This includes changes such as:
Changes to repayment frequency.
Changes to the loan term.
Other permitted changes to an existing facility.
Pepper Money will manage variation requests after the transfer.
Can customers apply for additional borrowing?
Existing home loan customers may be able to apply for an increase or top-up, subject to credit assessment and eligibility requirements.
HSBC will assess additional borrowing applications before the transfer. Pepper Money will become the contact for loan increase applications after the transfer.
What happens to construction and bridging loans?
HSBC and Pepper Money have stated that customers with construction or bridging facilities will receive information specific to their loans.
These facilities may have different drawdown, repayment or expiry arrangements and may not follow exactly the same process as a standard home loan.
Can customers opt out of the transfer?
Customers cannot opt out of the transfer while retaining the same HSBC loan.
If a loan remains open at the transfer date, it will form part of the transfer and Pepper Money will manage and service it from that point.
A customer who does not want their loan included in the transfer would need to repay or refinance the loan before the transfer occurs.
What is happening to HSBC's other Australian retail products?
The home loan portfolio sale is only one part of HSBC's withdrawal from Australian retail banking.
HSBC is separately winding down or transferring other retail products, including transaction accounts, savings accounts, term deposits, credit cards and certain investment products. Separate dates and processes apply to those products.
HSBC has also stated that its Australian branches will close in stages during the retail business wind-down. Customers should refer to the separate HSBC communications that apply to each product they hold.
Scam warning
HSBC and Pepper Money have warned that scammers may use the transfer as an opportunity to impersonate either organisation.
HSBC advises customers to be cautious if they are unexpectedly asked to:
Move money.
Provide passwords, PINs or security codes.
Take urgent action.
Follow an unexpected payment instruction.
Copies of official customer communications are being published on HSBC's Important Notices page so customers can compare them with communications they receive.
What happens next?
HSBC will continue to manage existing home loans until the transfer is completed.
Before the transfer, HSBC is expected to provide:
The confirmed transfer date.
Details of any action required.
Information about the offset sub-account.
Instructions concerning offset balance consent.
New account access information.
Details of any replacement debit card or direct debit changes.
After the transfer, Pepper Money will become the main contact for the ongoing management and servicing of the home loan.
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