Five-year fixed remortgage rate drops below 4%
HSBC has announced the latest round of rate reductions on its residential and buy-to-let mortgage product ranges, effective Thursday, January 4.
The reprice brings the high street lender’s five-year fixed rate for remortgage customers below 4% with a headline rate of 3.94% for those borrowing up to 60% of the property value.
As for two-year fixed for remortgages, rates will drop below the 4.50% threshold for the first time since early June last year, with the headline rate at 4.49% at 60% LTV, while those looking to fix longer term could switch to a 10-year fixed rate starting from as little as 3.99%.
For existing residential customers looking to switch, the lender will decrease rates across various loan-to-value (LTV) categories. The adjustments include reductions for two-, three-, and five-year fixed fee saver at 60%, 70%, 75%, 80%, 85%, 90%, and 95% LTV. Similar reductions apply to two-, three-, and five-year fixed standard at 60%, 70%, 75%, 80%, 85%, and 90% LTV.
Additionally, 10-year fixed fee saver at 60%, 70%, 75%, and 80% LTV, as well as 10-year fixed standard at 60%, 70%, 75%, and 80% LTV, will see decreased rates. The five-year fixed premier exclusive at 60%, 70%, 75%, 80%, 85%, and 90% LTV will also get rate reductions.
For existing residential customers borrowing more, the reductions mirror those for customers looking to switch. The adjustments apply to two-, three-, and five-year fixed fee saver at 60%, 70%, 75%, 80%, 85%, and 90% LTV, as well as to two-, three-, and five-year fixed standard at 60%, 70%, 75%, 80%, 85%, and 90% LTV. Ten-year fixed fee saver and fixed standard rates at various LTVs will also be cut.
HSBC’s rate adjustments extend to various customer segments, including residential first-time buyers and home movers, residential remortgage, residential remortgage cashback, and international residential. The rate decreases apply to different fixed terms and LTV ratios within these segments.
“HSBC is the latest high street lender to reprice following similar changes in the market in recent days,” Nicholas Mendes, head of marketing at independent mortgage broker John Charcol, commented. “HSBC have generally remained consistently among the best buys.
“But following recent changes over the past fortnight, they have slipped slightly lower than we would expect them to be. This latest move will no doubt move them amongst the Nationwide, Halifax, Virgin and Barclays rates.
“As has been noted in the past few days, lenders will be looking to capitalise on the pent-up purchase demand, and those coming to the end of their fixed rate in the first half of 2024, so we should expect to see a continuous battle among lenders.”
David Hollingworth, associate director at L&C Mortgages, added that the new HSBC rates are now “some of the lowest rates since the spike in rates last summer.”
“Although borrowers coming to the end of their current fixed rate this year will still be looking at a rise in payments, these new lower rates will at least take some of the sting out of the inevitable rise,” Hollingworth remarked. “HSBC’s move is notable in that its rates are on offer to those borrowers looking to remortgage, a departure from the recent trend of pricing favouring home movers.
“With large numbers of borrowers anxiously approaching the expiry of a fix taken during the ultra-low rate period, this is a welcome move and hopefully a signal for more lenders to follow suit, improving options for those facing payment shock. These cuts follow hot on the heels of New Year improvements by Halifax and others will be bound to follow suit. We thought the New Year would start with a bang and that’s proving to be the case.”
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