HSBC unleashes mortgage interest rate cuts with 20 deals below 5% | Personal Finance | Finance
HSBC announced another round of mortgage rate cuts this week in its “commitment” to offer the “best possible” deals.
Rates were slashed by an average of 0.15 percent on Wednesday, with some seeing drops by as much as 35 percent.
An HSBC UK spokesperson said: “We are here to support our customers and we remain committed to offering the best possible rates to all our customers.
“That is why we are pleased to announce cuts to mortgage rates across all our UK residential and international mortgage ranges, and across our Buy to Let range, for new and existing customers.
“These changes mean there are now over 20 mortgage options under five percent for customers, the most we have offered under this level for five months.”
The full list of new mortgage rates can be found here, but a brief overview of reductions is as follows:
Residential purchase/Home mover:
- Two-year 60 percent LTV at 4.98 percent (£999) reduced by 0.16 percent
- Five-year 60 percent LTV at 4.59 percent (£999) reduced by 0.10 percent
- Two-year 85 percent LTV at 5.74 percent (no fee) reduced by 0.14 percent
- Five-year 90 percent LTV at 5.09 percent (£999) reduced by 0.05 percent
- Two-year 60 percent LTV at 5.14 percent (£999) reduced by 0.13 percent
- Five-year 60 percent LTV at 4.99 percent (no fee) reduced by 0.21 percent
Buy to let home mover:
- Two-year 60 percent LTV at 5.34 percent (£1,999) reduced by 0.05 percent
Buy to Let remortgage:
- Two-year 60 percent LTV at 5.34 percent (£1,999) reduced by 0.1 percent
Existing customer switching (residential):
- Five-year 60 percent LTV at 4.54 percent (£999) reduced by 0.15 percent.
Brokers have welcomed the move, saying it marks a positive change in the market and are bracing themselves for a busy end to the year as activity levels pick up.
Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages, wrote on the platform Newspage: “Further rate reductions from HSBC are greatly appreciated, especially those in the higher loan-to-value brackets. This should kick-start another round of rate reductions, some before and some after the expected good news on inflation due this week. With each day that passes, there are more reasons to be positive in the mortgage market.”
Elliott Culley, director at Switch Mortgage Finance, added: “It’s no surprise to see a lender of HSBC’s size and stature continuing to reduce their rates.
“Swap rates are continuing to reduce as more positive data is being released on inflation cooling and base rate stability. Expect others to follow.”
Halifax, Yorkshire Building Society, Virgin Money, Bank of Ireland UK and Bank of Ireland UK for Intermediaries also revealed new sub-five percent two-year fixed mortgage rates this week.
According to an analysis by Moneyfactscompare.co.uk , only one lender had two-year fixed mortgages priced below 5 percent at the start of November, and there were no lenders offering one at the start of October.
Rachel Springall, finance expert at Moneyfacts said: “It’s encouraging to see cheaper mortgages on the market for borrowers, particularly the return of two-year fixed mortgages priced below five percent.
“This is great news for those who do not want to commit to a longer-term fixed deal. Several large lenders have slashed fixed mortgage rates and there is much anticipation for more cuts in the coming weeks. As we head ever closer to the year-end, lenders will be weighing up both the current competition and their own lending targets, so it’s a promising market for consumers looking for a new deal.”
Ms Springall added: “As always, it is imperative borrowers assess the overall true cost of any mortgage deal instead of assuming the lowest rates are the best choice, as some of the lowest priced deals carry high fees or few incentives.
“Seeking independent advice to weigh up all the options is wise, especially if borrowers have limited upfront cash to pay for any product fees or legal costs.”