Both Halifax and HSBC have made key changes to their mortgage rates this morning, effectively increasing rates for remortgages and lowering purchase fixed deals for those looking to move home.
This continued a common trend last week with other high street lenders.
Newspage asked mortgage brokers for their thoughts on this move by two significant lenders, and the current trends in the market.
Reaction:
Justin Moy, managing director at EHF Mortgages:
“More lenders are putting in place a significant pricing differential for those moving home compared to borrowers who are refinancing.
“There is still plenty of encouragement for the many first-time buyers and home movers given the recent changes in the market, with remortgage business effectively financing buyers.
“Lenders know that the product transfer market is still buoyant and will pick up enough business of its own accord.
“The home movers are the cherry on the cake at this time of year.”
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Darryl Dhoffer, mortgage expert at The Mortgage Expert:
“Lenders can afford to increase product transfer rates as, in many cases, they will have a captive audience of existing customers who will struggle to move elsewhere.
“Also, swap rates have increased in recent days, which is having an effect on lenders’ pricing, even though the Bank of England held the base rate steady last week.
“Remortgages and product transfers will be saturated this year, and these increases could see other lenders follow suit.”
Elliott Culley, director at Switch Mortgage Finance:
“After a year of low business levels when it came to the purchase market, lenders are looking to balance the books, to compensate for all the remortgage business they have and will continue to do.
“Lenders know remortgage business will happen regardless, so most will maximise efforts in the purchase market as they know this will have the most positive effect on their balance sheet.”
Richard Jennings CeMAP, founder and managing director at Richard Jennings Mortgage Services:
“These latest price increases follow a common thread of remortgage rates increasing.
“With swap rates shifting, it appears most larger lenders are focusing their funding towards attracting new purchase clients whilst retaining their existing customers through product transfers.
“As lenders’ net interest margins are squeezed, it appears that the losses on purchase products are being subsidised through remortgage client rates.”
Ranald Mitchell, director at Charwin Private Clients:
“The polarisation between the remortgage and purchase rates being offered by some of the big lenders is spreading, with HSBC and Halifax now joining in.
“Purchase activity is viewed as new lending opportunities for banks, and some are now promoting this to boost sales figures at the expense of borrowers who are remortgaging.”
Stephen Perkins, managing director at Yellow Brick Mortgages commented:
“After months of their lending books being filled with remortgage and product transfer business, the major lenders want to tilt the balance back towards purchase clients, especially as the housing market is on a bounce-back.
“This could help support house prices and overall property market transactions.”
Riz Malik, founder and director at R3 Mortgages:
“It’s going to be a bumpy road ahead as lenders reprice to maintain service standards and also to factor in market swings.
“There are going to be a lot of changes in a short period of time so the need for borrowers to work with brokers to submit fully packaged cases is more important than ever.”
Andrew Montlake, managing director at Coreco:
“The plethora of rate changes in the market shows no sign of abating anytime soon, and this constant revision of rates, both up and down, makes it more challenging for brokers and consumers alike.
“It is frustrating that rates are being changed so often at a time when swap rates seem to be relatively benign, but this is where mortgage brokers really prove their worth in making sure borrowers do not miss out due to sudden rate pulls at relatively short notice.
“The additional stress put on brokers at these times, however, needs to be addressed.”
Gary Bush, financial adviser at MortgageShop.com:
“Great news to see two of the UK’s biggest mortgage lenders decreasing their rates again for consumers purchasing properties.
“It’s a little confusing, however, that they don’t seem to want to help people remortgaging their homes, with their rates for these all-important transactions increasing.
“It’s no wonder the Government and financial industry guru Martin Lewis recommends taking the advice of qualified advice firms at these times.
“It can be very frustrating to track lenders’ lowest fixed rate movements at the moment.”
Ben Perks, managing director at Orchard Financial Advisers:
“This is a trend that we are starting to see across the board. It’s clear that lenders are trying to entice these customers.
“Better rates and products are made available for purchases and the remortgage borrowers are stuck with the leftovers.
“The remortgage market has been buoyant and with more than 1.5 million borrowers coming off low rates this year, it will continue to be.
“There will also be an abundance of clients capital raising for debt consolidation; as they struggle to manage household budgets or for home improvements, as the move to a bigger property is now unaffordable.
“Remortgages will be a big area of business for lenders in 2024 and I wish they would price attractively, rather than take advantage, especially on deals to existing customers.”
Akhil Mair, director at Our Mortgage Broker:
“The fluctuations in mortgage rates announced by Halifax and HSBC, alongside similar adjustments from other high street lenders, reflect the dynamic nature of the financial markets.
“While these changes may not be unexpected given the recent market movements, they serve as a reminder of the importance of staying informed and adaptable in our approach to financial decisions, particularly in times of heightened unrest.
“As always, Our Mortgage Broker are here to provide guidance and support through these developments and make decisions aligned with your financial goals.”
