What do these repricing moves by big lenders indicate?
HSBC has announced a series of adjustments to its residential and buy-to-let mortgage products, effective from tomorrow, October 22.
The changes include rate increases and decreases across various fixed rate offerings, affecting both new borrowers and existing customers.
For existing residential customers switching or borrowing more, the high street lender will decrease rates for two-year fixed standard mortgages at 80% and 85% loan-to-value (LTV).
For new residential home buyers and first-time buyers, the bank is raising rates on several products. These include the two-year fixed fee-saver mortgage at 60% LTV and the five-year fixed standard and high-value mortgages at 60%, 70%, and 75% LTV. Meanwhile, rates for two-year fixed standard mortgages at 80% and 85% LTV are set to decrease.
Homebuyers of energy-efficient properties with EPC ratings of ‘A’ and ‘B’ will see similar changes. Increases are set for two-year fixed fee-saver products at 60% LTV and five-year fixed standard and fee-saver products at 60%, 70%, and 75% LTV. However, two-year fixed standard mortgages at 80% and 85% LTV will see rate reductions.
Remortgage customers will experience mixed adjustments, with increases on two-year and five-year fixed fee-saver products at 60% LTV, and decreases on offerings at higher LTVs. Rates for five-year fixed premier exclusive mortgages at 90% LTV will be lowered.
In the buy-to-let segment, rates are set to decrease for the two-year fixed fee-saver and standard mortgages at 60%, 65%, and 75% LTVs. International mortgage products are also affected, with rate hikes for residential and buy-to-let products across various LTV bands.
“HSBC’s latest mortgage rate changes reflect a strategic and varied approach, with a mix of increases and decreases across its product lines,” said Nicholas Mendes, mortgage technical manager at John Charcol. “The reductions in the two-year fixed standard products at 80% and 85% LTV suggest a focus on making mid-tier borrowing more attractive, particularly for homeowners looking to remortgage. However, the increases in lower LTV products, especially at 60%, point to a more cautious response to recent market volatility and rising funding costs.
“These adjustments align with similar moves from major lenders such as Barclays, Halifax, Santander, and NatWest, who have all reacted to fluctuations in swap rates. While these repricing changes signal short-term market volatility, they don’t necessarily indicate a long-term trend.”
Mendes noted that while falling inflation has strengthened the Bank of England’s position to consider rate cuts in November and possibly December, the market remains sensitive to changes in the economic outlook, with attention focused on next week’s Budget for further direction.
“For borrowers nearing the end of their fixed rates, securing a rate now might be a wise move, given the potential for further changes post-budget,” he added. “However, it’s important to stay vigilant and review options regularly, as many lenders may reprice downwards in the coming months if economic conditions stabilise.”
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