As HSBC hikes, could the sub-5% fixed rate risk disappearing altogether?

HSBC is the latest name on a long list. NatWest, Nationwide and TSB have all put rates up this month, and the rest will before October. The cause is the same for every one of them. The cost of Government borrowing has shot up on the back of the Iran conflict and fresh inflation worries, and lenders price fixed rates off that, not off what the Bank of England does. Below 4% deals were already rare at the higher end of LTV, and I'd expect them to vanish for anyone without a big deposit. Getting them back needs calmer markets and a Chancellor the market actually trusts.

For fixed rate deals in particular, we are creeping closer to no sub-5% options; tracker and discounted rates are still priced 'competitively ', but borrowers need to remember that a few base rate increases may bring you to parity with its fixed rate cousin. Is this a short-term situation to ride out, as we did earlier in the year, or will it remain a serious factor into 2027? It's hard to predict, so work with what we do know, reserve deals where possible, and stay close to your mortgage broker. Use their knowledge and their advance notice of market changes.

HSBC's increase from Tuesday marks another lender falling in line with a swap market rattled by Middle East tensions and rising oil prices. It won't be the last. Almost all others have already repriced in recent weeks, and pressure on funding costs isn't easing yet.Right now, borrowers with the biggest deposits or the most equity can still find 2 and 5 year fixes around 4.5% to 4.6%, but that window is narrowing by the week. Sub-4% has barely existed this year outside a handful of low deposit trackers, so the question isn't whether sub-4% survives. It's whether sub-5% does. For those without a big deposit or years of equity behind them, the days of sub-5% mortgages are numbered.Swap rates will decide the next move, and they look spooked. Until they settle, expect rates to keep drifting up, not down.

When HSBC makes sweeping hikes like this, it's not a tweak, it's a lender quietly admitting the cheap money has gone. Sub-5% was always a handful of best-buy unicorns and not the norm, and unicorns don't survive a stampede.

I would expect the rest of the high street to follow within days with more of the same turbulence through September. Sub-5% will be back eventually, but probably not before well into next year. If you like a listed rate today, stop reading and go lock it in.

Mortgage rates don't move on their own, they are priced off swap rates, and swap rates are the market's best guess about where the Bank of England base rate is heading over the next few years. The sub 4 percent mortgages we saw recently only existed because the market had priced in a run of base rate cuts. What's changed in the last few weeks is the market pushing those cuts further out, so now the question is not whether sub 4 percent is gone for good but whether the Bank of England moves sooner or later than the market now expects. Nobody can call the timing with certainty, which is why lenders are repricing across the board rather than waiting to see.

An awful way to start the week for borrowers, with HSBC putting rates up again. It's been the trend for weeks now.

Sub-4% fixes have already gone. The question now is whether sub-5% goes the same way, and on current pricing that's a real risk.

This is being driven by the bond markets. Gilts and swaps aren't kind to borrowers, and the Bank of England has yet to meet this week. Oil has rocketed after the Saudi pipeline shutdown, which feeds straight into inflation.

My view is the MPC holds again on Thursday. But pressure is building and inflation is coming down the tracks fast, so at some point they have to decide whether they keep holding or break.

As for when rates come back down, I wouldn't hold my breath. The Iran war is unresolved, the US midterms are ahead of us, and no Budget until late October. Too much uncertainty for markets to be positive.

I do not think sub-4% is dead, but I do think the window is closing fast.

HSBC moving rates across the board is another warning that lenders are no longer competing in the same direction they were a few weeks ago. Higher swap rates, energy-driven inflation fears and growing uncertainty around the Bank of England are feeding straight into fixed pricing.

My expectation is more repricing before we see meaningful cuts again. Borrowers waiting for a magical 3-point-something rate could easily end up watching today’s deal disappear instead.

We will get back below 4%, but I would not build a mortgage strategy around guessing the exact month.

Mortgage rates do not send goodbye emails. They disappear overnight.

If the current deal works, secure it. You can always review again if pricing improves.

HSBC going up again so soon after last week’s repricing is a sign that mortgage pricing has turned a little more unsettled. I wouldn’t say sub-4% fixes are dead, but they could become much harder to find if funding costs keep moving against lenders.

Borrowers should not panic, but anyone buying or remortgaging soon should get their options reviewed early and secure a suitable rate rather than waiting for the perfect moment. If the market improves again before completion, there may still be an opportunity to switch.

Whether sub-4% or sub-5% products disappear temporarily is less important from a specialist finance perspective than what sustained increases in mortgage pricing do to transactions already being planned.

We’ve recently been looking at both bridging loan exits and landlord acquisitions, and in each case relatively small changes in the cost of longer-term borrowing can alter the numbers.

For a bridging borrower planning to refinance, a higher stress rate can reduce the amount available on the term mortgage and potentially create an equity shortfall. For landlords considering a purchase, higher rents and softer property prices may improve the headline yield, but higher borrowing costs can still prevent the deal from working.

I wouldn’t try to predict when sub-4% rates will return. What matters now is borrowers testing their refinance or purchase assumptions against the rates actually available rather than the rates they hoped would be available.