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HSBC announces selected 5-year fixed rates under 5% - brokers divided

Journalist: Riz Malik

ended 27. September 2023

Following yesterday's announcement, HSBC's new rates have now gone live, with the highlights including 5-year fixed rates under 5%:

  • FTB Purchase 5-year fixed rate at 4.90% (Premier customers) with a £1499 arrangement fee up to 60% LTV
  • FTB & Home Mover 4.99% 5-year fix with £999 arrangement fee up to 75% LTV

Brokers were mixed in their response to the rates. According to Darryl Dhoffer, founder of Bedford-based The Mortgage Expert: “HSBC are leading the way now with a 75% loan-to-value product priced under 5%. Let's hope other lenders follow suit in the days ahead. Things are really heating up now as lenders compete for market share.”

Lewis Shaw, founder of Mansfield-based Shaw Financial Services, was also impressed: “The rate war continues and with other lenders set to reprice in the coming few days, now is the time to get a deal locked in.”

But Rohit Kohli, director at Romsey-based mortgage broker, The Mortgage Stop, was disappointed that the sub-5% rates didn't extend to those remortgaging: “It's great to see rates come back below 5% for people, at least for those who can stump up the deposit required. Disappointingly, though, if you're remortgaging you are still looking at 5%+ and I think HSBC have dropped the ball on this with their differential pricing. However, I don't think it will be long before they readjust again once other lenders have made their own moves.”

Kohli's views were shared by Craig Fish, Managing Director at London-based mortgage broker Lodestone: “This move from HSBC is a clear indication that they want to write business, and sends a direct message to the other lenders. Offering a sub-5% product up to 75% LTV is great news, it's just a shame it isn't available to remortgage customers, which is bizarre. Either way, expect more lender moves in the coming days.”

Meanwhile, Ranald Mitchell, director of Norwich-based independent mortgage broker, Charwin Private Clients, was not sure if the rate cuts would be enough to stimulate property market activity: "This is a good move by HSBC going sub-5% for first-time buyers and home movers, although how many will have that size of deposit remains to be seen. The question is, are rates at this level enough to reinvigorate the market or will buyers and movers continue their wait-and-see approach?"

Peter Stamford, director of Alston-based Moor Mortgages, went one further: “First-time buyers with a 25% deposit can now get a sub-5% mortgage from HSBC. If anyone has ever met a first-time buyer with a 25% deposit, please let me know so I can invite them to give a TED Talk on financial miracles.”

Charles Breen, director of Wellingborough-based mortgage broker, Montgomery Financial, was also sceptical: “What first-time buyer has a 25% deposit? If HSBC think there are any out there, then these people shouldn't be in charge of financial institutions. This is purely a media exercise in my opinion.”

Steven Hargreaves, mortgage adviser at Leeds-based The Mortgage Co, urged people to seek advice in the current climate: “Ensure you seek independent mortgage advice as a lender that has made an offer will never advise you they now have lower rates available."

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10 responses from the Newspage community

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Craig Fish
Director at Lodestone Mortgages
This move from HSBC is a clear indication that they want to write business, and sends a direct message to the other lenders. Offering a sub-5% product up to 75% LTV is great news, it's just a shame it isn't available to remortgage customers, which is bizarre. Either way, expect more lender moves in the coming days.
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Charles Breen
Founder at C B
It certainly is good news that lenders are reducing rates below the 5% watermark but this is purely a marketing ploy and a vanity metric to be able to boast that they are also doing sub 5% rates now. What first-time buyer has a 25% deposit? If they think there are any out there, then these people shouldn't be in charge of financial institutions. This is purely a media exercise in my opinion.
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Peter Stamford
Mortgage Expert at Stamford Home Finance
First-time buyers with a 25% deposit can now get a sub-5% mortgage from HSBC. If anyone has ever met a first-time buyer with a 25% deposit, please let me know so I can invite them to give a TED Talk on financial miracles.
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Darryl Dhoffer
Founder at The Mortgage Geezer
HSBC are leading the way now with a 75% loan-to-value product priced under 5%. Let's hope other lenders follow suit in the days ahead. Things are really heating up now as lenders compete for market share.
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Rohit Kohli
Director at The Mortgage Stop
It's great to see rates come back below 5% for people, at least for those who can stump up the deposit required. Disappointingly, if you're remortgaging you are still looking at 5%+ and I think HSBC have dropped the ball on this with their differential pricing. However, I don't think it will be long before they readjust again once other lenders have made their own moves.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
This is a good move by HSBC going sub-5% for first-time buyers and home movers, although how many will have that size of deposit remains to be seen. The question is, are rates at this level enough to reinvigorate the market or will buyers and movers continue their wait-and-see approach?
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Simon Bridgland
Director at Charwin Private Clients
I don't think this was the line drawn in the sand that I had expected from HSBC. I feel there is more they could be willing to do over the coming week or so, but that all depends on what the competition does this week.
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Graham Cox
Director at Bridging Hub
HSBC are the latest lender to start offering rates below 5%, albeit for purchases on a 5-year fix and with at least a 25% deposit. Nevertheless, it shows the general direction of travel and if, as expected, inflation continues to fall, we could see the majority of rates beginning with a 4 in the months ahead including, crucially, for homeowners looking to remortgage.
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Steven Hargreaves
Mortgage and Protection Adviser at The Mortgage Co
More good news. We have had a spate of lenders reducing rates in the past two weeks. There are many positives for buying in the present market, as we have seen property prices reduce and now we're seeing lower interest rates. As interest rates reduce, I contact each of my existing clients who have an application going through with that lender, and ensure they are always on the lowest rate, this is a massive benefit for using a mortgage broker in the current climate. Ensure you seek independent mortgage advice as a lender that has made an offer will never advise you they now have lower rates available. Let's hope the Interest rate war continues, as all lenders are looking to fill their order books up now for completions during the first quarter of 2024.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
It's great to see rates fall below the 5% mark and I'm sure more lenders will follow, and we may see rates fall further still, but I think we're reaching the point where falls will slow and become less dramatic in terms of their size. A period of time with rates averaging about 4.5% could be good for everyone and allow the property market to regain some confidence.