HSBC has introduced rate increases across its entire fixed rate mortgage range, with changes coming into effect from tomorrow (Wednesday 6th March).
Ranges effected by the increase include existing residential customer switching, existing customer borrowing more, residential first-time buyer and home mover, and residential remortgage ranges.
Newspage asked brokers for their thoughts on this announcement, and the general state of the mortgage market at the moment.
Reaction:
Justin Moy, managing director at EHF Mortgages:
“In a blow to borrowers, HSBC have joined Barclays and NatWest this week, with increases across their entire range of fixed rate deals, both residential and buy-to-let.
“Swap rates have continued to increase, suggesting there is not a lot to look forward to in the Budget this week for mortgage holders.
“Mortgage holders need a pick-me-up and the past 6 weeks or so certainly haven’t provided it.”
Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management:
“The glimmer of a rate war we witnessed at the beginning of 2024 is well and truly over.
“It’s now time for borrowers to stop procrastinating or waiting for the bottom to fall out of the market, and get their ducks in a row.
“If, by a miracle, rates start dropping again after the Budget, products can be changed, but if they don’t, the rates around today will be gone tomorrow.”
Ranald Mitchell, director at Charwin Private Clients:
“More mortgage market misery as HSBC price the wrong way for a consumer perspective.
“They are the latest lender to increase rates in what has now become an established upward trend, further dampening the hopes of millions of mortgage holders and aspiring homeowners, that this year would be better than last.
“After a scintillating start, 2024 is shaping up to be a repeat of 2023.”
Gary Bush, financial adviser at MortgageShop.com:
“This is the second week in a row of rate hikes from big hitter bank, HSBC.
“You have to wonder if this is a knee-jerk reaction to what potentially might be released by Chancellor Jeremy Hunt in tomorrow’s Budget.
“For mortgage holders, this is another round of bad news that has been relentlessly released by the UK’s lenders in the past two weeks.
“All eyes are now on the next inflation figures, which, if they come in positive, will help improve the mood music.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“The continual rate rises are like a never-ending story, except a really bad version without Falkor and David Bowie.
“It’s bad news for consumers and even worse news if you’re about to buy and haven’t sent all your documents to your broker.
“The timescales we’re currently getting on rate withdrawals are, in some cases, a couple of hours. If you snooze, you lose.”
Rowan Frayling, managing director at J Finance:
“When one of the market leaders hasn’t raised their rates in a few days, at the moment you can be sure it won’t be long until they follow suit. And here is the proof.
“We will see what tomorrow’s Budget brings for the mortgage market but for now, this is a lender simply following the trend of the past few weeks, namely hiking rates.”
Charles Breen, founder at Montgomery Financial:
“Yet more mortgage pricing pandemonium. Another lender joins the rollercoaster of rates creating turmoil for borrowers.
“This is the harsh reality of lenders’ short-sighted mortgage moves to steal market share rather than looking at the longer-term picture and creating a more sustainable lending environment.
“This whiplash pricing only fuels mortgage chaos and uncertainty, further damaging borrowers’ finances.
“It’s just fickle pricing from lenders plain and simple.”
Elliott Culley, director at Switch Mortgage Finance:
“HSBC are the latest in a long line of mortgage lenders that have decided to increase rates on the back of higher swap rates.
“HSBC were currently one of the more competitive lenders in the market so this reaction is most likely to manage current service levels.
“With the Spring Budget tomorrow, this could also be a cautious pre-emptive step to mitigate any turmoil.”
Rohit Kohli, director at The Mortgage Stop:
“HSBC have dealt another hammer blow to borrowers ahead of tomorrow’s Budget.
“Hopefully these are tweaks rather than significant changes.
“This will add pressure onto the Chancellor to act but frankly I don’t this Chancellor has the imagination or gumption to act.”
Ben Perks, managing director at Orchard Financial Advisers:
“Another increase for HSBC, thankfully with a little more notice this week.
“While they haven’t yet told us what the rates will rise by, the fact that they are looking to increase their entire product range suggests that they want to turn the tap off for a while.
“I’d expect to see rates that take them out of contention for new business temporarily.
“Hopefully this is a tactical measure that will then enable them to react strategically in the aftermath of the Budget announcement tomorrow.”
Simon Bridgland, broker and director at Release Freedom:
“The continued rise in fixed rates isn’t abating just yet, with HSBC upping their offering.
“However with the Budget on the doorstep, have HSBC just shot their bolt too soon and in the wrong direction?
“Knowing how much they like to lead the way with deals, they are sure to make a swift about-turn if the news from Jeremy Hunt this Wednesday is good for the financial markets.
“Is HSBC being the wise elder in the market or is the young upstart Gen H, having dropped their rates this week, aiming to take a front row seat in the rate tables?
“Was it good foresight of Gen H or just getting themselves in line with the rest of the market, we will soon see.”
