Major lenders add to wave of rate cuts as competition heats up
Halifax Intermediaries and HSBC UK have announced changes to their mortgage offerings, including rate reductions and policy adjustments.
Halifax has lowered rates on selected fixed rate remortgage products by up to 0.25%, while product transfer and further advance rates have been reduced by up to 0.31%.
The lender said it has also updated its online product search tool and sourcing systems to reflect the new rates.
Meanwhile, HSBC UK has cut its standard variable rate (SVR) on residential mortgages from 6.99% to 6.74% – its lowest SVR since January 2023.
“Following a review, we are reducing our standard variable rate to 6.74%, which will benefit those customers who have chosen to transition onto an SVR after their fixed rate term has finished,” said Oli O’Donoghue, director of mortgage lending at HSBC UK.
Since the Bank of England’s rate cut last month, falling swap rates have increased expectations of improved mortgage affordability. Lower swap rates — used by lenders to price fixed rate mortgages — have given banks, building societies, and specialist lenders more flexibility to reduce borrowing costs, leading to a wave of mortgage rate cuts aimed at attracting homeowners looking to refinance or secure new loans.
HSBC UK is also expanding mortgage availability for foreign nationals residing in the UK. The bank will now align lending criteria for direct applicants with the changes introduced for broker-originated applications in September 2024.
Updates include allowing up to 95% loan-to-value (LTV) for applications where at least one applicant has indefinite leave to remain, up from 75% LTV. Gifted deposits will also be considered in such cases.
For applicants without indefinite leave to remain, but who have been UK residents for at least a year or meet minimum income thresholds (£75,000 for sole applicants, £100,000 for joint applicants), the maximum LTV has increased from 75% to 85%. These applicants can now also use mortgage borrowing for debt consolidation, and UK mortgage rates will apply instead of non-resident rates. Deposits must be gifted from the applicant’s own resources.
“Our position as a truly international bank gives us a great insight into the wants and needs of international customers coming to the UK,” O’Donoghue said. “Aligning our UK policies to international customers who want to come to us direct for a mortgage will help more people achieve their home-buying aspirations.”
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