High street bank joins other lenders raising rates as funding pressures hit lender margins
HSBC UK will increase rates across a wide spread of residential and buy-to-let mortgage products from tomorrow, March 12, in a repricing that shows how borrowing costs can move quickly during periods of market uncertainty.
The high street lender has announced changes that shows rises across fixed-rate products for existing customer switching and for borrowers seeking additional borrowing. It also includes increases for first-time buyers, home movers and remortgage customers, including cashback options.
The repricing extend to energy efficient home products for properties rated EPC ‘A’ or ‘B’, as well as international residential and international remortgage products. On the buy-to-let side, HSBC UK is increasing rates for purchase and remortgage, including energy efficient home buy-to-let products, existing customer switching and borrowing more, and international buy-to-let/remortgage.
The update also includes increases to Premier-exclusive products, which HSBC UK said are available only to existing HSBC Premier current account holders. The bank added that intermediaries should confirm account status before submission, and that customers who open a Premier account after submission would need an amendment or rate change to access preferential pricing.
“HSBC’s move highlights how quickly lenders can respond when funding costs shift,” said Nicholas Mendes (pictured right), mortgage technical manager at John Charcol. “Swap rates rose sharply earlier in the week as markets reassessed inflation risks linked to higher oil prices and geopolitical tensions, and that pressure is now feeding through into mortgage pricing.
“What stands out here is the breadth of the change. HSBC has increased rates across a wide range of residential and buy-to-let products, covering first-time buyers, home movers, remortgages, and existing customers switching deals. When a lender of this size reprices across so many parts of the market, it often signals margins are being squeezed.
Mendes noted that while swap markets have eased slightly today, suggesting some of the immediate volatility may be settling after two- and five-year SONIA swaps fell back by around 10 basis points, lenders tend to reprice with a lag after sharp movements in funding costs.
“If swaps stabilise at these levels, we may see pricing settle again, but the past few days show how quickly market sentiment can change when geopolitical events feed into inflation expectations,” he said.
“For borrowers, it’s another reminder that mortgage pricing can move quickly during periods of market uncertainty, so anyone approaching a purchase or remortgage may want to keep a close eye on rates and consider securing a deal early while keeping their options open.”
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