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HSBC announces new rates from March 1

ended 27. February 2023

HSBC have announced a whole raft of product changes that are going live from 1 March. Essentially, rates are going up again so we asked brokers for their thoughts.

8 responses from the Newspage community

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David Conway
Director at Clayhall Financial Services Ltd
The rollercoaster for borrowers continues and we just hit a sharp bend. Mortgage rates have been dropping in recent weeks but HSBC putting rates up is an indicator of what's to come. Banks are paying over 4% to borrow, so need a margin when they lend on as a mortgage. While rates are impossible to predict, speaking to a broker can cut through the time and research to find the best deal for you relative to your circumstances.
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Craig Fish
Director at Lodestone Mortgages
Historically, lenders have withdrawn products and increased rates for a whole raft of reasons, one being to manage workloads. I suspect that this is the key reason behind these changes as they were one of the first lenders to go sub-4%, so I imagine that they are rather busy. That said, we have seen SWAP rates increasing this last couple of weeks, which is probably more down to uncertainty over inflation and energy price caps, and so they could also be bringing their pricing into line with the rest of the market until things settle again.
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Justin Moy
Managing Director at EHF Mortgages
Mortgage lenders have always managed their workloads by tweaking their rates up or down, depending on market conditions, so lenders that have poked their toes in the sub-4% sea have not stayed too long. This move likely reflects the fact swap rates have increased a little over the past few weeks, and other lenders are still reducing rates, so there will be occasions where we see some mixed messages. Again, this highlights why working with a broker will mean clients will have access to the wider range of deals and mortgage lenders, and make sure that the choice of deal is not just based on the rate, but it fitting your situation.
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Luke Thompson
Director at PAB Wealth Management
My main feeling when HSBC released sub-4% interest rates a few weeks ago was that this was a quick rush for some business and that it probably wouldn't last long term. I would not be surprised if they had some funds that they had purchased at a lower rate last summer and had been sitting on to enable them to release a rate that was cheaper than the base rate at the start of this year. I think this probably signals the end of the rate cuts we have seen in recent times as lenders will now start pitching their rates slightly above 4% again whilst they wait to see what happens with the base rate towards the end of the year.
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Rob Gill
Managing Director at Altura Mortgage Finance
Having fallen steadily since the start of the year, it seems we've now reached the end of the current cycle of mortgage lender rate cuts. HSBC and other lenders are either pausing for breath or increasing rates now, meaning it could be a good time for borrowers to secure a competitive rate.
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Jonathan Burridge
Founding Adviser at We Are Money
We are probably close to where rates will bottom out and they will bobble around as lenders manage pipelines and, of course, their funding. It is, in many ways, another sign of a return to "normal". Just keep calm and carry on. There isn't much to see here at the moment.
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Gary Boakes
Director at Verve Financial
HSBC rates have been very competitive and they are still managing to look at payslips within two working days, so the rate increase is not down to service. Is this as a reaction to the next Bank of England meeting later in March and the likelihood of the base rate going to 4.5%, or the recent increase in swap rates, or both? If this is the case and HSBC are going first then I imagine we will start seeing lenders following suit. Equally, it could just be that they want to increase their margins. Only time will tell and we'll see how the other lenders react.
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Amit Patel
Adviser at Trinity Finance
Lenders who offered cheap fixed-rate mortgage deals below 4% interest earlier this month, are now raising those rates, or pulling them from the market altogether. We all know what happens when one major lender decides to increase their rates, the rest follow so as not to get swamped with a major influx of applications. SONIA swap rates have increased over the past few weeks, and it's for this reason that fixed rates are increasing.