Effective from tomorrow, Tuesday 16th January, HSBC is set to make a number of changes to its residential mortgage product ranges.
The lender increased its cashback incentive, offering for first-time buyer customers at 95% loan-to-value (LTV) from £250, £350 and £500 across its 2-year fixed, 3-year fixed and 5-year fixed rates to £750, £750 and £1,000 respectively.
For existing residential customers switching, a number of products have been reduced, including its 2-year and 3-year fixed fee savers at 60%, 90% and 95% LTV, 2-year, 3-year and 5-Year fixed standard at 60%, 80%, 85% and 90% LTV, 5-year fixed fee saver at 60%, 80%, 85%, 90% and 95% LTV and its 5-year fixed premier exclusive at 60%, 80%, 85% and 90% LTV.
Other ranges that benefit from this wave of reductions include products for existing residential customers borrowing more, residential first-time buyers, residential home movers and international residentials.
Nicholas Mendes, head of marketing at John Charcol, said: “Swaps have eased over recent days as fears on the potential impact on inflation of ships avoiding the Suez Canal have eased.
“We’re now returning to 5-year money closing in on 3.50%.
“HSBC have been quick to react to competitor re-pricing last week and the drop out of a competitor lender who didn’t last too long due to service level.
“HSBC are a completely different lender so these latest rates will further strengthen their hold in the market, and capitalise on this new year wave of optimism and opportunities.”
Reaction
Katy Eatenton, mortgage & protection specialist at Lifetime Wealth Management:
“What a great start to the week. The only high-street lender that hasn’t repriced is Nationwide currently. Swap rates are still edging down so the reductions look set to continue. It’s blue Monday today but borrowers will be feeling anything but.”
Elliott Culley, director at Switch Mortgage Finance:
“As each day passes, mortgage lenders are becoming more confident in the stability of the current market. It wasn’t that long ago that we saw lenders only dipping their toe into rate reductions, but now we are seeing some lenders dive head-first and offering larger reductions. HSBC would have seen the competitiveness of some of their bigger rivals and knew they had to act. The new rates for 2-year fixed rates seem more targeted as they are concentrating on higher LTVs. Don’t be surprised if these rates become the most competitive on the market.”
Ben Perks, managing director at Orchard Financial Advisers:
“It’s great to see another round of rate reduction from HSBC, all the more so ahead of this week’s inflation print. HSBC have made several cuts in quick succession so it shows a real appetite to lend and is fantastic news for the consumer and the wider property market. Let’s hope more lenders show this level of eagerness to lend. It’s always great to see a bit of healthy competition on rates.”
Anil Mistry, director and mortgage broker at RNR Mortgage Solutions:
“Monday morning and yet more fantastic mortgage news. HSBC is once again at the forefront of rate cuts, with the added bonus of a 24-hour notice period. Hats off to HSBC. It’s now intriguing to see how swiftly other major lenders will respond to this latest development in the ongoing rate war.”
Darryl Dhoffer, mortgage expert at The Mortgage Expert:
“HSBC are masters of the muted markdown. The fanfare of lower rates is always welcome, but why not trumpet their reductions from the rooftops as other lenders do? To announce a reduction without the changes invites scrutiny. The sooner we get the rates, the sooner we can communicate with the consumers, which is better in the new era of financial transparency.”
Ranald Mitchell, director at Charwin Private Clients:
“The relentless race for the top spot continues without hesitation, this time HSBC coming out with further rate cuts across their entire range. Add to the mix varying levels of cashback for first-time buyers, and this is a bank that means business. With property prices rebounding, and mortgage rates reducing, anyone considering a home purchase would be wise to get a move on.”
Gary Bush, financial adviser at MortgageShop.com:
“HSBC has come out again fighting with lower fixed mortgage rates and tweaking, in the favor of applicants, the terms of their deals. The rate war rages on and we expect the next salvo to be unveiled by HSBC’s competitors shortly – this is all great news for struggling households.”
Steven Hargreaves, mortgage and protection adviser at The Mortgage Co:
“This is a great start to the new week and is the second round of rate cuts from HSBC in less than two weeks. It will provide a welcome boost to the housing market, and with first-time buyers returning to the housing market, this ongoing rate of attrition will be welcomed with open arms. It will be interesting to see how the rest of the lenders follow suit. Over the past few months, when one of the big lenders has reduced rates, the others all followed very quickly.”
Graham Cox, founder at Self Employed Mortgage Hub:
“After slashing rates on January 4th, HSBC continues to price aggressively with these further reductions, plus enhanced mortgage cashback of up to £1,000 for first-time buyers. Lenders are falling over themselves to stimulate demand at present, which is great news for anyone looking to buy a home.”
Peter Stamford, director and Mortgage Expert at The Mortgage Uni:
“And away we go on another week of rate cuts. HSBC leading from the front as they have done so often recently. More great news for home movers and remortgagers alike.”
Rohit Kohli, director at The Mortgage Sto:
“This is excellent news with which to start the week. HSBC clearly want to lend and are not hanging around for the inflation stats due later in the week to lay down their statement of intent. We’re now each trying to second guess which lender will be next.”
Charles Breen, founder at Montgomery Financial:
“Are we within touching distance of 2-year products for higher LTVs such as 90% starting with a 3? I think we are. The more high street lenders that keep reducing the better, especially for all those who are coming off of their 1% mortgage products. Moves like this will help prevent a whole cohort of borrowers from becoming stuck with their current lenders and becoming mortgage prisoners by default. Is this HSBC foreshadowing what the Bank of England are likely to do? Are they reacting to whispers and rumours on Threadneedle Street? Trying to create a bit of a market buzz before the other lenders possibly jump on the bandwagon in the coming days?”
Jamie Alexander, mortgage director at Alexander Southwell Mortgage Services:
“It’s fantastic to witness another round of rate reductions from HSBC, especially with this week’s inflation print looming. The successive cuts from HSBC indicate a strong willingness to lend, benefiting both consumers and the broader property market. The hope is that more lenders will exhibit a similar eagerness to lend, fostering healthy competition in rates, much like the trend observed in recent months where rate adjustments from one major lender quickly prompted others to follow suit.”
James Bull, mortgage Broker at JB Mortgages:
“Great to see HSBC leading the way with mortgage rate cuts. This can only add to the feel-good factor creeping in as we look forward to 2024 with increasing optimism.”
Simon Bridgland, broker/director at Release Freedom:
“And we’re off to the races once again, this week, straight out of the gates is HSBC, showing some promise for the higher loan-to-values with the increased cashback for first-time buyers. Fantastic that it’s an amount which will certainly prick up the ears of any cash-strapped colts. Let’s hope the rates at the higher loan to values don’t turn a potential Arabian thoroughbred into a gelding or worse a donkey.”
Ken James, director at Contractor Mortgage Services:
“HSBC are fighting tooth and nail for business. This is another wave of rate cuts that will inject further competition into the mortgage market. Brace for more announcements this week as other lenders digest these cuts.”
Nicholas Mendes, mortgage technical manager at John Charcol:
“NatWest have seen their position fall slightly following the recent week of lender repricing. Whether it was waiting for markets to settle or anticipating other lender movements, either way, it’s great to have them on board.
“I expect they will be the latest lender to offer a sub 4% deal, following in the shadows of other high-street lenders like HSBC, Virgin, and Santander.
“Despite a few days of swaps increasing last week, markets have returned to their joyful selves, and continue to price in bank rate reductions over the next few years.”
