Should borrowers expect more mortgage rate cuts?
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HSBC has implemented changes across its residential mortgage product range, effective from today, January 13.
The adjustments include the introduction of a new two-year product and lowered fees for existing offerings, aiming to provide more competitive options for borrowers.
The high street lender is launching a two-year Premier Exclusive range with a £999 booking fee, available for residential purchase, remortgage, and existing customers. This product will cater to both UK and international applications, excluding the energy efficient homes (EEH) range. In addition, HSBC has reduced the booking fee for its five-year Premier Exclusive range to £999.
Meanwhile, rate reductions apply to existing residential customers switching or borrowing more, first-time buyers and home movers, remortgage customers, and international residential clients. The five-year fixed Premier Exclusive rates at 70%, 75%, 80%, 85%, and 90% loan-to-value (LTV) have all been reduced. International borrowers will also benefit from rate cuts on the five-year fixed Premier Exclusive product at 70% and 75% LTV.
“HSBC has announced a fresh round of mortgage rate reductions specifically tailored to individuals meeting the Premier eligibility criteria, helping to limit any potential impact on service levels,” commented Nicholas Mendes, mortgage technical manager at John Charcol. “HSBC Premier clients already enjoy some of the best buy purchase rates in the market, and these latest repricing’s further solidify their position across the 70-90% LTV range.”
The move comes during a period of rising swap rates, which influence mortgage pricing. While many lenders have resisted increasing rates, Mendes warned this could be temporary.
“Lenders appear to be holding back on rate increases to avoid unsettling the market, but this restraint is unlikely to last indefinitely,” he said. “If swap rates continue to rise, it inevitable that mortgage rates will have to give at some point, as lenders cannot absorb higher costs indefinitely.
“For now, borrowers should look to act quickly and observe the trends while lenders take a cautious, wait-and-see approach, likely hoping that recent market movements are a short-term blip in sentiment.
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