HSBC have announced further rate cuts today across its mortgage range. Brokers have suggested the cuts could be a reflection of the weak GDP print on Wednesday morning, with the likelihood of a rate cut coming earlier than expected in 2024. One said HSBC may have rate table FOMO and want to reclaim the top spot.
According to Lewis Shaw, owner at Shaw Financial Services: “With gilt yields and SONIA swap rates falling off the back of poor GDP data, which showed UK GDP contracting, expect more lenders to cut fixed-rate mortgages. Whilst contracting GDP isn’t good, future rate cuts are sure to lessen the panic for the millions due to renew their deals in 2024 and possibly spur a little more activity in the housing market.”
It’s a sentiment shared by Rob Gill, managing director at London-based broker, Altura Mortgage Finance: “The disappointing October GDP figures will increase speculation that the Bank of England will deliver a base rate cut sooner rather than later. Coupled with pressure for mortgage lenders to deliver a strong start to 2024 to make up for a dire 2023, we will likely see more rate cuts into the New Year and beyond.”
Paul Kermath, Chief Operating Officer at Finanze, agreed: “Based on the latest GDP figures, we were expecting some further rate cuts to be announced. Is this the start of it? Who knows. Borrowers are still struggling with impending rate changes, so it’ll be interesting if other lenders follow suit to try to stimulate business and encourage consumer confidence. An early Christmas bonus? Let’s see.”
Rhys Schofield, Brand Director at Peak Mortgages and Protection, suggested lenders are pricing a rate cut into fixed rate mortgage pricing: “Bad news on GDP often means good news for borrowers as it puts pressure on the Bank of England to reduce rates and protect the wider economy. It seems that rate reductions are definitely now being priced into what lenders are charging for new fixed-rate mortgages.”
Rowan Frayling, Managing Director at J Finance Ltd, said HSBC have got rate table FOMO: “HSBC having FOMO for not being at the top of the rate tables strikes again. No rates are mentioned but judging by their current status at about third or fourth lowest rate on most cases I am researching, I suspect they’re going for pole position. Brace for a big one.”
Katy Eatenton, Mortgage & Protection Specialist at Lifetime Wealth Management, added: “I’ve been waiting for this announcement. These will be quite significant reductions to get back to the top of the sourcing tables. It’s an exciting end to the year on the mortgage front and should really help kick off property market activity in 2024. Mortgage rates are still far higher than what they once were but they’re getting more competitive by the day.”
Elliott Culley, director at Hayling Island-based Switch Mortgage Finance, said: “Good to see HSBC concentrating on remortgages instead of just purchases. Over the weeks we have seen lenders driving lower rates for purchasers whilst remortgage products have not had as much love. This has led to disparity between these two types of customers and the rates they could get. It would have been good to see rate cuts across the whole range as these changes will only benefit customers at lower LTVs.”
Meanwhile, Craig Fish, director at London-based broker, Lodestone Mortgages & Protection, is expecting the rates to be quite punchy: “This feels just like Christmas. You know you have a present, but is it what you were hoping for? Based on today’s GDP data and further declines in SWAP rates, I suspect that there may be a market-leading rate in here somewhere, especially considering HSBC hasn’t been at the top of the rate charts for a while. Are they going to go back to the top with a bang?”
James Bull, director at JB Mortgages, was upbeat: “It is great to see one of the big lenders HSBC reducing interest rates. I am looking forward to seeing how the other big lenders react to this. Hopefully, this will lead to improved consumer confidence and a bump in the mortgage market in 2024.”
Ken James, director at Contractor Mortgage Services, concluded: “The Local bank is at it again. HSBC has once again announced rate reductions. You have to think that the latest GDP figures have had some impact and that there will be other lenders considering making more changes as they look to their end-of-year targets. This may also give the Bank of England more drive to kick start base rate reductions sooner than planned in an attempt to increase the growth of the economy.”
