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HSBC announces mortgage rate cuts and rises, leaving "brokers scratching their heads"

Journalist: Justin Moy, Contributing Editor

ended 26. March 2024

HSBC has just announced changes to their entire fixed rate range, starting from tomorrow (27th). It is the first major lender to start reducing after last week's better than expected inflation data and dovish comments from Threadneedle Street, but the fact higher LTV products are reducing, lower LTV products are increasing, and  BTL products are improving has confused brokers. Newspage asked brokers for their thoughts on this surprising announcement today: what does this mean for mortgage pricing, where is the logic, and how will the rest of the high street lenders react?

12 responses from the Newspage community

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Justin Moy
Managing Director at EHF Mortgages
A strange decision by HSBC this morning. Clearly those benefiting will be first-time buyers with smaller deposits, but the lender is penalising those with less risky borrowing. Landlords will be delighted to see some help for their beleaguered finances.
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Ken James
Director at Contractor Mortgage Services
“Should I stay or should I go”? You can imagine the HSBC decision makers singing this song with their decision to make increases and decreases. HSBC need to send the right signals not confuse everyone. There are signs that there is room for cuts. We need the rest of the market to send out positive signals and get rates in the right direction.
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Rohit Kohli
Director at The Mortgage Stop
If you wanted an example of how unpredictable the mortgage market is at the moment, you can't get a better example than this announcement from HSBC. Reducing rates in their higher LTV products will be welcomed by many. The increase in lower LTV products will have taken many by surprise as it's often these borrowers that see reductions first. Either way HSBC is the first major lender to start reducing and hopefully we see others follow their lead.
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Charles Breen
Founder at C B
Despite the schizophrenic nature of this announcement, with cuts and hikes, HSBC deserve some credit for being one of the first major lenders to announce rate reductions. Hopefully HSBC’s move will hammer down housing cost for homeowners.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
The most bi-polar rate announcement this week has left brokers scratching their heads. Some rates are up, some are down, with seemingly little pattern to it. However taking a step back this seems to suggest that HSBC think there is room for rates to come down but are currently creaking a bit with their service levels so they also don't want to be too competitive on price either.
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Peter Stokes
Director of Mortgages at Davidson Deem
HSBC's announcement is a little surprising, given the trend of many lenders raising their rates recently. OK, some of the changes are upwards, but many are down, and that can only be a good thing. Money market rates have generally reacted favourably to the recent MPC decision to keep the base rate on hold, with nobody voting for an increase, and surely the subsequent reductions in swap rates should allow lenders to lower their fixed rates a little. HSBC were already very competitive, so I would not be surprised to see other lenders follow suit.
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Darryl Dhoffer
Founder at The Mortgage Geezer
HSBC's latest product changes resembles a game of Jenga for the visually impaired. Swap rates are down across the board, so why are selected rates increasing? It all seems a master PR ploy to reduce in the first week of April and gain some publicity, when in fact rates should be reducing sooner.
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Elliott Culley
Director at Switch Mortgage Finance
This is a surprise from HSBC, who are normally associated with leading the charge on rate reductions. The latest update has left most in the industry scratching their heads. It will be a mixed reaction as there are certainly some benefits at higher LTVs, but once again exisiting borrowers will feel like they weren't invited to the party as there is an increase across the board for borrowers needing to remortgage.
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Gary Bush
Financial Adviser at MortgageShop.com
HSBC are doing the Hokey Cokey this morning. The only way is up, no down, no up, no down, no up. Are they in or out of the mortgage market? Why can't they make their mind up? It's no wonder UK mortgage holders are unsure of the direction of travel of mortgage rates at the moment despite last week's great news on inflation and the dovish comments emerging from Threadneedle Street.
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Graham Cox
Director at Bridging Hub
It's a schizophrenic mortgage market right now. HSBC appear to be attempting to stimulate first-time buyer demand with these cuts to their high loan-to-value products. But existing homeowners are paying the price, as rates on their lower LTV products have increased, presumably to maintain overall profit margins.
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Luke Thompson
Director at PAB Wealth Management
Is this the start of a new rate war as lenders and the markets try to second guess when the first base rate cut will be? I think it could well be. Hot on the heels of these rate cuts from HSBC, we have just had Barclays announncing their own rate cuts to go alongside other recent rate cuts from some smaller lenders. When the big boys start getting involved in rate cuts, this is when we can see the market moving very quickly. No one will want to be losing market share especially in what have been challenging market conditions over the past year. I expect to see more lenders reducing their rates in the coming days and weeks.
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Akhil Mair
Director at Our Mortgage Broker
It looks like HSBC is shaking things up in the mortgage world. With changes across the board, it's like a game of musical chairs for rates. Higher LTVs are taking a dip, lower ones are inching up, and BTL products are getting a makeover. Talk about keeping us on our toes. Kudos to HSBC for stepping up their green game with the Energy Efficient Homes Range. As for the rest of the high street gang? Time will tell how they'll dance to this tune. But for now, let's grab our calculators and see where these rate shifts take us.