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Mortgage "tug of war" as HSBC cuts resi and buy-to-let rates

ended 15. September 2023

A mortgage ‘tug of war’ is unfolding between lenders, brokers have said, as HSBC is the latest lender to announce rate cuts today across its residential and buy-to-let range (see screengrabs, below, for all changes). HSBC announced:

  • We will be introducing cashback offerings with an incentive of £350 across our 3 Year Fixed Standard and 3 Year Fixed Fee Saver products within our UK Residential First Time Buyer and Home Mover ranges.

According to Jamie Lennox, director at Norwich-based mortgage broker, Dimora Mortgages: “The mortgage tug of war continues between lenders, as they battle it out for market share in a barren market. HSBC often lead the way with reductions so we should expect even more lenders to follow and soon see some lenders offering residential deals starting with a 4 on a 5-year fixed rate. If we see another positive set of inflation data this month, these reductions could keep coming thick and fast.”

Charles Breen, director of Wellingborough-based mortgage broker, Montgomery Financial, said it is less a tug of war than an all-out arms race: “These reductions are the latest moves in what increasingly resembles an all-out arms race between mortgage lenders. They are striving to compensate for the business they have lost. It is looking ever more likely that we are drawing nearer to the point where fixed rates may begin with a 4, potentially sparking a resurgence in the property market as potential buyers rejoin the fray. Following a summer filled with pessimism, it appears that, as we transition into autumn, we may have reached a turning point.”

Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages, added: “Rates just continue falling with the cycles between reductions speeding up. What were weekly rate reviews are now happening every other day. While this is indicative of market confidence that the base rate is near its peak, it’s also a clear indication that lenders are fishing for market share in a heavily drought-shrunk pool of borrowers. With committed lending targets to be hit by year end, expect the rate fight to continue to escalate.”

Meanwhile, Gary Boakes, director of Salisbury-based mortgage broker, Verve Financial, was head over heels for HSBC: “I am absolutely loving HSBC's competitiveness. Over the past year they have made sure that they are always near the top of the sourcing tables and other lenders must be getting sick of them now as they are consistently leading the way with their rate cuts.”

Justin Moy, founder at Chelmsford-based mortgage broker, EHF Mortgages, said simply: “It may be one small step for HSBC, but it's a potentially giant step for mortgage borrowers.”

Gareth Davies, director at Southampton-based broker, South Coast Mortgage Services, was also upbeat: “Once again, this is pleasing news from one of the 'big boys'. Lenders are fighting for market share in a dampened market. The panic and mayhem of July seems a long way away.”

Elliott Culley, director at Hayling Island-based Switch Mortgage Finance, noted the positive impact on landlords: “HSBC usually lead the way when it comes to rate reductions. We won't know until Monday what the new rates are, but we will be getting closer to dropping under 5%, which will be great. They are also dropping the rates on their buy-to-let products, which is good news for landlords with properties in their personal names.”

His views were echoed by Katy Eatenton, mortgage specialist at St Albans-based Lifetime Wealth Management: “It is great to see buy-to-let products reducing, too, as this is a real problem for landlords coming off super-low fixed rates this year.”

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9 responses from the Newspage community

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Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
Rates just continue falling with the cycles between reductions speeding up. What were weekly rate reviews are now happening every other day. While this is indicative of market confidence that the base rate is near its peak, it’s also a clear indication that lenders are fishing for market share in a heavily drought-shrunk pool of borrowers. With committed lending targets to be hit by year end, expect the rate fight to continue to escalate.
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Editor
Justin Moy
Managing Director at EHF Mortgages
More good news from HSBC, especially as it includes buy-to-let and product transfer products, too. The improvement in SWAPs continues to drive down rates, as does the low volumes of applications. It may be one small step for HSBC, but it's a potentially giant step for mortgage borrowers.
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Editor
Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
This will be a good start to the week next week, as where HSBC leads the others follow, so I will expect more reductions across the board.
It is great to see buy-to-let products reducing, too, as this is a real problem for landlords coming off super-low fixed rates this year.
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Elliott Culley
Director at Switch Mortgage Finance
HSBC usually lead the way when it comes to rate reductions. We won't know until Monday what the new rates are, but we will be getting closer to dropping under 5%, which will be great. They are also dropping the rates on their buy-to-let products, which is good news for landlords with properties in their personal names.
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Jamie Lennox
Director at Dimora Mortgages
The mortgage tug of war continues between lenders, as they battle it out for market share in a barren market. HSBC often lead the way with reductions so we should expect even more lenders to follow and soon see some lenders offering residential deals starting with a 4 on a 5-year fixed rate. If we see another positive set of inflation data this month, these reductions could keep coming thick and fast.
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Gary Boakes
Director at Verve Financial
I am absolutely loving HSBC's competitiveness. Over the past year they have made sure that they are always near the top of the sourcing tables and the other lenders must be getting sick of them now as they are consistently leading the way with their rate cuts.
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Charles Breen
Founder at C B
These reductions are the latest moves in what increasingly resembles an all-out arms race between mortgage lenders. They are striving to compensate for the business they have lost. It is looking ever more likely that we are drawing nearer to the point where fixed interest rates may begin with a 4, potentially sparking a resurgence in the property market as potential buyers rejoin the fray. HSBC's decision to implement more rate cuts represents a positive development. Moreover, as swap and gilt yields have declined in recent weeks, there's hope that this trend will persist and HSBC are just following suit. Lenders are pulling out all the stops to stimulate demand after a challenging period. Following a summer filled with pessimism, it appears that as we transition into autumn, we may have reached a turning point.
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Gareth Davies
Director at South Coast Mortgage Services
Once again this is pleasing news from one of the 'big boys'. Lenders are fighting for market share in a dampened market. The panic and mayhem of July seems a long way away.
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Anil Mistry
Director and Mortgage Broker at RNR Mortgage Solutions
HSBC, as always, continues to set the benchmark for rate reductions. Even amid the challenges posed by the COVID-19 pandemic, HSBC demonstrated greater flexibility compared to most other industry leaders when it came to rates and lending restrictions. It comes as no surprise that they are once again taking the lead in initiating further rate cuts, especially in light of the current economic climate and the anticipation of Mr. Carney and his team potentially raising the Bank of England base rate once more. This is indeed fantastic news from HSBC, and we can only hope that other prominent high-street lenders will follow suit with additional rate cuts.