Nationwide and HSBC cut mortgage rates as small reductions turn into an “avalanche”

NATIONWIDE and HSBC are the latest banks to cut their mortgage rates as small reductions turn into an “avalanche” and brokers urge borrowers to lock in deals now.

Fixed rates at Nationwide are being reduced by up to 0.2% from Thursday - while HSBC confirmed it is also due to cut rates on Friday.

The changes will apply to their Existing Customers Moving Home, First Time Buyer and Remortgage, Switcher and Additional Borrowing ranges. 

HSBC has also announced both residential and B2L rate cuts, but these won't be revealed until Friday.

Shaun Sturgess, Director at Sturgess Mortgage Solutions, said “now is the time to lock into rates”.

He added: "We’re seeing a huge amount of volatility in lender pricing at the moment. While it’s undoubtedly positive news for borrowers, especially those remortgaging or stepping onto the ladder for the first time, it shows the need to lock into rates while they are there and then monitor the market for further reductions - or get your broker to do it on your behalf. 

"But these reductions are another clear sign that lenders remain competitive and that affordability is gradually improving. Lenders, these days, can announce reductions one day and pull rates the next so borrowers and brokers alike need to bring their A game."

Stephen Perkins, Managing Director at Yellow Brick Mortgages, said borrowers will be “delighted”.

He continued: "A couple of pebble sized rate reductions have now started an avalanche of more substancial rate cuts. Borrowers will be delighted to see rates falling once again reducing the costs of borrowing."

Michelle Lawson, Director at Lawson Financial, called it a “rate cut summer party”.

She added: "This is great for borrowers but lenders really do need to make sure they have the resource and process to make these changes swiftly and seamlessly if they are becoming more regular. 

“The other alternative more meaningful cuts less often as a broker's work is currently spending significant time securing the new lower rates.”

Justin Moy, Managing Director at EHF Mortgages, added: "Another wave of rate cuts from two of the largest high street lenders as the cost of money and increased competition drive lender activity this summer. 

“Keeping up with these regular improvements is becoming a job on its own, but with borrowers starting to feel the benefit of recent cuts, it feels like the right time to grab a new deal if yours is due in 2025, before the unexpected pushes rates up once more.”

Jack Tutton, Director at SJ Mortgages, said it was positive to see more sub-4% deals on the market.

He continued: "The mortgage market is really hotting up in time for the approaching heatwave, especially with this being Nationwides and HSBC's second reduction in a week. We have seen several lenders reducing their rates this week, more products are creeping below the 4% marker which will be welcome to mortgage holders. 

“The big question will be whether these cuts are being made on the assumption that the Base Rate is going to be cut next month.”

Rohit Kohli, Director at The Mortgage Stop, agreed, adding: "Another round of rate cuts from two major lenders in one week is very welcome news for borrowers. Nationwide and HSBC both making moves shows the direction of travel, and it's positive. 

“That said, the pace of changes is making things tricky on the ground. We’re submitting applications, only for new deals to land the next day, and of course clients want the lower rates. It’s a challenge, but one we’ll gladly take if it means more competitive pricing. Let’s hope this momentum keeps building because borrowers need it.”

Harry Goodliffe, Director at HTG Mortgages, said “these small nudges are adding up”.

He added: "More green shoots in mortgage land. It’s great to see big players like Nationwide and HSBC trimming rates again, especially on first-time buyer and remortgage ranges. 

“It’s not a game-changer just yet, but it does show growing confidence and competition returning to the market. These small nudges are adding up.”

Rob Peters, Principal at Simple Fast Mortgage, said now's the time for the Bank of England to cut interest rates.

He continued: "These cuts are welcome news and will give borrowers a bit of breathing room, but they’re incremental, not transformational. The real test will be the news on inflation and therefore whether the Bank of England delivers meaningful rate cuts this year. 

“Until then, lenders are doing what they can to stay competitive, but affordability remains stretched for many.”

Pete Mugleston, Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk, agreed, adding: "This is more great news for borrowers as two big high street lenders join the summer rate cut party. Rates are slowly creeping towards the sub 4% range, which will have borrowers of all types reaching for the strawberries and cream in celebration.

"Hopefully, this trickle becomes a flood and more lenders start to follow. If the Bank of England cuts the base rate at the next MPC, borrowers will be delighted."

Sean Horton, Managing Director at Respect Mortgages, also said: “Rate cuts are gathering real momentum now, with Nationwide and HSBC joining the summer pricing party. This feels different from the tentative reductions we saw earlier - lenders are responding to falling swap rates and competing harder for business. 

"The timing suggests confidence is returning, but borrowers need to move quickly. With processing times stretched and rates changing weekly, securing a competitive deal requires swift action.”