Ian Stuart (pictured), HSBC UK’s chief executive, has said the bank will try its “very best to limit that pain for customers” but warned that rates are unlikely to fall anytime soon.
Speaking on Sky’s Ian King Live Stuart warned that there will be a significant shock for borrowers coming off of historic low fixed rates into the new interest rate environment.
Stuart told Ian King Live “300,000 customers will be impacted this year, so it is significant.
“If you took a mortgage maybe two years ago or five years ago, myself included, you will come off a mortgage rate I guess around 1.5%, something in that area, and your new mortgage is going to cost something closer to 5%.
“This is not a subject to be flippant on. This is a very, very important topic in UK society today.
“What we are trying to do at HSBC is try our very, very best to limit that pain for customers. I believe it’s really important we try and do that.Â
“[But] I don’t think rates are going to be dropping any time soon because this is linked to inflation and inflation has ended up being more sticky than we anticipated.”
The latest Moneyfacts.co.uk data has the average 2-year fix standing at 5.86% with 5-year coming in at an average rate of 5.51%.
Over the weekend Labour released research showing that homeowners were now paying some £7,000 more a year in mortgage than they were before September’s mini-Budget.
The next Bank of England interest rate decision is due on 22nd June.
