HSBC announces rate hikes
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We’re increasing our rates
With effect from Wednesday 23rd September, we’ll be making a number of increases across our residential and BTL mortgage rates. Click here to view all the upcoming changes.
HSBC UK
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HSBC is almost certainly pulling its stand-out best buy 4.76% two-year fix and 4.72% five-year fix as part of these changes. The First Direct 4.81% two-year fix and 4.74% five-year fixes are probably going as well.
With more of HSBC’s competitors offering either a couple of sub-5% fixes or no sub-5% fixes at all, I expect the bank will follow current market trends, which means the rates will be a fair bit higher. Rates are still getting more expensive but the swap rate market seems to have stabilised a bit because there have been a couple of mortgage price reductions. The mortgage market is still very active, particularly with borrowers keen to secure a rate quickly to avoid paying more than necessary. There may well be more price hikes this week.
With more of HSBC’s competitors offering either a couple of sub-5% fixes or no sub-5% fixes at all, I expect the bank will follow current market trends, which means the rates will be a fair bit higher. Rates are still getting more expensive but the swap rate market seems to have stabilised a bit because there have been a couple of mortgage price reductions. The mortgage market is still very active, particularly with borrowers keen to secure a rate quickly to avoid paying more than necessary. There may well be more price hikes this week.
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Rate increases with less than 24 hours’ notice create an unnecessary scramble for borrowers, brokers and solicitors. I have recently had to ask clients to make same-day decisions simply to avoid losing an affordable deal.
HSBC’s latest increase is another reminder that fixed mortgage rates can move regardless of whether Bank Rate changes. Borrowers approaching the end of a deal should start reviewing their options early, because in this market, waiting even one day can mean paying more.
HSBC’s latest increase is another reminder that fixed mortgage rates can move regardless of whether Bank Rate changes. Borrowers approaching the end of a deal should start reviewing their options early, because in this market, waiting even one day can mean paying more.
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HSBC’s changes extend beyond homeowners to buy-to-let purchase and remortgage products. For property investors, that makes the terms available when refinancing particularly relevant.
Bridging Loan Directory has reported on cases where higher mortgage rates have reduced the amount investors could refinance onto, leaving additional equity to find or a bridging loan outstanding for longer.
This notice does not give the size of HSBC’s increases or establish that borrowing limits will change. But it reinforces a practical question from our reporting: does the planned mortgage still provide enough to repay the bridging loan?
The interest rate matters, but so does the amount available at the point of exit.
Bridging Loan Directory has reported on cases where higher mortgage rates have reduced the amount investors could refinance onto, leaving additional equity to find or a bridging loan outstanding for longer.
This notice does not give the size of HSBC’s increases or establish that borrowing limits will change. But it reinforces a practical question from our reporting: does the planned mortgage still provide enough to repay the bridging loan?
The interest rate matters, but so does the amount available at the point of exit.
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Rate hikes are going to keep happening until the market volatility stabilises. Unfortunately this is not showing any signs of abating currently. We expect to see more rate hikes for the foreseeable future, and hope we see some calm as soon as possible.
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Less than 24 hours' notice, and another sub-5% option heads for the exit. The 4.76% two-year and 4.72% five-year fixes were among the last genuinely sharp deals on the shelf, and borrowers are now being asked to make same-day decisions on 25-year commitments.
The frustrating part is that nobody can point to anything on the horizon suggesting this reverses soon. Swap rates have steadied slightly, but that is hardly a recovery. If your deal ends within six months, start reviewing now. In this market, waiting a day costs you money.
The frustrating part is that nobody can point to anything on the horizon suggesting this reverses soon. Swap rates have steadied slightly, but that is hardly a recovery. If your deal ends within six months, start reviewing now. In this market, waiting a day costs you money.