Reaction: HSBC first big bank to cut mortgages below 4% as 'rate war' heats up
HSBC is leading the heard with is headline 3.94% five-year rate - is this hope for borrowers? Are clients suddenly able to afford what they previously couldn't?
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Another volley of arrows let fly by one of the UK's major banks in the fixed rates mortgage war. These forthcoming rate reductions from HSBC on the back of Halifax's reductions yesterday are very welcome and will help press on a downward momentum on rates as all the major lenders want to make a bright start towards their 2024 lending volume objectives. A great time to get yourself a January-sale mortgage rate.
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These reductions in interest rates will help restore borrower confidence following the significant increases experienced in 2023. HSBC might be leading the way, but the upcoming week will offer insights into the financial landscape of 2024. Individuals with mortgages approaching renewal, especially those who secured a deal 3-6 months earlier, may want to consider re-evaluating their options if they have the opportunity.
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HSBC reducing rates to as low as 3.94% can only be a positive and a huge step in the right direction for mortgage holders. HSBC's rates at a similar loan-to-value and product were over 5.8% only as far back as July, the reduction of nearly 2% in this short space of time will attract more people back into the market. The big question will be whether other lenders will want to keep up with HSBC and continue the rate war.
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In the bustling financial jungle, a new predator has emerged: HSBC, with its headline-grabbing 3.94% five-year mortgage rate. Like a cunning lioness luring prey with a tempting antelope carcass, this offer has sent ripples of excitement through the borrower herd. This seemingly benevolent offering deserves a closer look. While the low rate dangles like a juicy termite mound, the true question is: can borrowers, laden with the baggage of inflation and stagnant wages, actually afford this seemingly succulent morsel?
The answer, is nuanced. For young consumers nimble and unburdened, this rate might be the key to unlocking their first patch of savanna. However, for older consumers, weighed down by the bloat of existing mortgages and the ever-present threat of cost of living and higher interest rate deals forthcoming, the picture is less rosy.
The answer, is nuanced. For young consumers nimble and unburdened, this rate might be the key to unlocking their first patch of savanna. However, for older consumers, weighed down by the bloat of existing mortgages and the ever-present threat of cost of living and higher interest rate deals forthcoming, the picture is less rosy.
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HSBC's turn to counter-punch in the latest round of rate reductions, following on from Halifax. With 5-year fixed rates now starting with a 3, many who've been stalling on making mortgage decisions or house moves may well be spurred into action. There will be more reductions, as the tit-for-tat continues, and the price war getting more aggressive each turn. The ongoing rate reductions boost lending potential too. Affordability, particularly on 5-year fixed rates, will allow many people to borrow more, making that move a possibility, and importantly, the pay rates are becoming much more palatable.
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Throughout 2023 HSBC was always the first to hit the market with the lowest rates and it looks like their intention in 2024 is more of the same. Even though Gen H announced similar rates for those purchasing yesterday, if this rate is indeed available to those wishing to remortgage then this is groundbreaking and could see the start of the rate war that all brokers want to see and this is more competition in the remortgage market, not just for those purchasing.
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HSBC has certainly 'upped the Ante' this morning with their announcement of sub-4% remortgage deals for those with 40% equity, for those looking for a 5 or 10-year Fixed deal. Also their shorter 2-year fixed deals from 4.49% are market-leading on the High Street. This is the first of many predicted changes within the mortgage market to entice borrowers back to the market, but the first High Street to move. This makes the move by Halifax yesterday look a bit redundant.
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This is great news for mortgage holders who are looking to re-mortgage over the coming months. This will certainly give comfort to many homeowners who need their mortgages reviewed in 2024. With a key mortgage player offering sub 4% five year fixed rate. Am confident others will follow in the coming days. We just need some sub 4% 2 Year fixed rates
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The shiny new lower loan to value deals won't change the affordability for many mortgagors, especially to the extent that they will feel empowered to move or borrow more, most have good memories of much higher rates and volatility in the markets so would tread very carefully on stretching themselves. Stress tests which lenders apply to applications are unlikely to change, given the uncertainty of current world events and a looming general election, so affordability will remain static for some time to come. Those hoping for the return of ultra-low rates before they start banging on brokers' doors to borrow more will be waiting a long time for something which simply won't happen.
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This is no surprise, HSBC is usually one of the better lenders when it comes to reducing rates. I expect this trend to continue, with more lenders joining the party soon, which will ease the pain for mortgage holders.
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We are going to be seeing a return to the market of buyers who were feeling priced out last year, 2024 will be a busy year. I have had 21 enquiries this week alone as the demand increases
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HSBC leading the way I hear you say? Absolutely as they always do, with HSBC now dipping under the 4% mark this will surely lead the way for the other lenders to become more competitive. As normally where HSBC leads others will shortly follow.
Of course, HSBC's rate at 3.94% only applies to remortgages whereby the savvy homeowner has at least 40% equity in their property in a slightly down-valued market but if the shoe fits then the above deal is the lowest on the market for what feels like a very long time, and a very welcome addition to the market it is too. Here at Henchurch Lane we are seeing our clients becoming more and more confident as time goes on and rates start to ease, ultimately saving the client more money than they had maybe previously thought or committed to paying out.
Brokers need to keep their fingers on the pulse with lenders lowering their rates which seems to be every other day at the moment, ensuring they get their client the best rate available.
Of course, HSBC's rate at 3.94% only applies to remortgages whereby the savvy homeowner has at least 40% equity in their property in a slightly down-valued market but if the shoe fits then the above deal is the lowest on the market for what feels like a very long time, and a very welcome addition to the market it is too. Here at Henchurch Lane we are seeing our clients becoming more and more confident as time goes on and rates start to ease, ultimately saving the client more money than they had maybe previously thought or committed to paying out.
Brokers need to keep their fingers on the pulse with lenders lowering their rates which seems to be every other day at the moment, ensuring they get their client the best rate available.
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Further proof if any required that the Fixed-rate war is starting again in 2024, Halifax the largest lender in the UK, struck early, the rest have got to react and quickly to avoid being left behind.
We would expect other lenders to all follow suit in the next few days.
Lending was slow the last quarter, therefore all lenders are looking at their Q1/Q2 completions and need to act quickly in 2024.
We would expect other lenders to all follow suit in the next few days.
Lending was slow the last quarter, therefore all lenders are looking at their Q1/Q2 completions and need to act quickly in 2024.
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A great start from HSBC - as sure as eggs are eggs the other big players will respond - good news for borrowers and the start of hopefully a proper gloves off price war hotting up
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A sub 4 percent mortgage from HSBC is fantastic news, and will go a long way to restoring confidence in the housing market. What we need now is lower rates for first-time buyers at 90 and 95% LTV. That will really get the market moving.
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With affordability there are two sides to the coin. There is what a lender will lend, and what a borrower thinks they can personally afford. Some borrowers feel they can afford far more than a lender will lend (especially true of the self employed who offset a lot of costs) and others borrow far less than they could borrow, wanting to be much more conservative in their expenditure.
it is great to have another sub 4% option for borrowers, and this will lead to more flexible affordability longer term when lenders can start to apply these reductions to their affordability calculators
it is great to have another sub 4% option for borrowers, and this will lead to more flexible affordability longer term when lenders can start to apply these reductions to their affordability calculators
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Happy New Year for all existing and prospective homeowners, with one of the big banks in HSBC slashing their rates across the board. The rate war we witnessed in the mortgage market towards the back end of 2023 continues to rumble on, with the other major lenders now highly anticipated to follow suit quickly, reducing their rates to maintain momentum and hold market share. Lenders have big targets to hit in 2024 and will need to come out of the blocks with a good start early in the year. With rates continuing to fall, many of those who couldn't afford to buy last year will now start to come out of the woodwork with confidence they now can.
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This is good news for borrowers as hopefully, this will be the start of other lenders further reducing their interest rates and continuing the price war that is currently happening. I anticipate a sustained trend of lenders lowering their interest rates, particularly on 5-year fixed rates. Lenders remain keen on lending, and in light of the reduced lending activity in 2023. If borrowers have cut back on their spending to reflect the increase in interest rates then they should not see as big an increase in their monthly mortgage payments are previously anticipated.
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As the big lenders lead the way with early New Year rate drops it’s good news for borrowers. Many people have held off taking on new commitments, especially where family finances are already stretched. For those coming off very low fixed rates it’ll be a relief to see more options. Reducing the impact of ‘rate shock’ is going to be a key area where lenders could gain new business.
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A welcome move from HSBC and one that will no doubt help spur the rest along too. Sub 4% is great news given what we were looking at last Summer. Sub 4% on a 2-year deal would be a monumental move though.
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With inflation falling, base rate forecast to be cut several times this year, and lenders keen to make up for a disappointing 2023, it's no surprise to see lenders launching eye-catching rates to get a head start in 2024.
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Let's hope this is a sign for lenders starting as they mean to go one. Where HSBC go with pricing, others tend to follow. Sub 4% rates are huge fist shots fired in what looks like a big rate war in 2024.
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Promising indicator! We are optimistic that such rate reductions, coupled with declining house prices, will effectively ignite revitalization in the property market.
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Since the beginning of November, we are seeing a seismic shift in lenders' attitudes and actions, they are being more aggressive in their pricing as they believe like the rest of us that we have seen the worst of the inflationary spike and the base rate will come down in the next few months.
Banks are leading where the Bank Of England is too scared and timid to, without these positive interventions by lenders we would be looking at a much worse picture for borrowers than we currently are.
The number of enquiries we are seeing has seen a dramatic uptick as the message is getting out to the wider public that lenders are drastically cutting rates in spite of the insipid, glacial response of the redundant Bank Of England Monetary Committee
Banks are leading where the Bank Of England is too scared and timid to, without these positive interventions by lenders we would be looking at a much worse picture for borrowers than we currently are.
The number of enquiries we are seeing has seen a dramatic uptick as the message is getting out to the wider public that lenders are drastically cutting rates in spite of the insipid, glacial response of the redundant Bank Of England Monetary Committee
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HSBC lining up to recommence the fixed mortgage rate war into 2024 is sweet music to the ears of both new borrowers and clients shortly coming off their fixed rates. We have seen a good amount of new enquiries over the Christmas and New Year period, with one making an application at lunchtime on New Years Day! For existing borrowers securing a new mortgage rate up to 6 months ahead is available from a range of lenders that allows you to secure a new rate now and indeed drop that rate if another lower one becomes available, and securing the new one prior to the end of mortgage holders existing deals. It certainly looks like, with the lower rate expectations, lenders' affordability criteria will be loosening up.
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What a fantastic way to kick off 2024! After a cautious 2023, where high interest rates and negative press deterred many from moving homes, it's promising to witness a positive shift this year.
People are adjusting their expectations, realising that the days of 1% and 2% rates are behind us. Fortunately, a rate starting with a 3 is much more appealing than the 6% rates offered just a few months ago.
As rents continue to rise, this serves as added motivation for first-time buyers to hop onto the property ladder. Many are discovering that their mortgage payments can be more affordable than the increasing rents, making homeownership an attractive and sensible choice over paying someone else's mortgage through rent.
People are adjusting their expectations, realising that the days of 1% and 2% rates are behind us. Fortunately, a rate starting with a 3 is much more appealing than the 6% rates offered just a few months ago.
As rents continue to rise, this serves as added motivation for first-time buyers to hop onto the property ladder. Many are discovering that their mortgage payments can be more affordable than the increasing rents, making homeownership an attractive and sensible choice over paying someone else's mortgage through rent.