Increases across multiple product ranges signal wider upward pressure on fixed rates
HSBC UK will raise a wide range of residential and buy-to-let mortgage rates from tomorrow, March 6, with Coventry for intermediaries also announcing increases across its fixed-rate lines.
In an update to intermediaries, HSBC announced it would apply higher rates to most of its core residential products, including options for existing customers switching, additional borrowing and first-time buyers. Rates of select products across standard and premier ranges at various loan-to-value (LTV) tiers – typically 60%, 70%, 75%, 80%, 85%, 90% and 95% – are increasing from tomorrow’s effective date.
The moves cover mainstream home mover, first-time buyer and remortgage products, as well as specialist ranges such as energy-efficient home deals and cashback variants. The lender is also lifting pricing for international residential, UK buy-to-let and international buy-to-let products, again at multiple LTV bands.
Meanwhile, Coventry for intermediaries has separately confirmed that it will raise fixed rates across both its residential and buy-to-let portfolios, including limited company buy-to-let, effective Monday, March 9.
Coventry’s changes will affect new lending and existing borrowers switching products, with end dates on the affected fixes also being pushed out.
According to one market commentator, the moves from two major players are likely to set the tone for other lenders’ pricing decisions in the coming days.
“We are now seeing the first big name lender moves begin to feed through,” said David Hollingworth (pictured right), associate director at L&C Mortgages. “HSBC has this morning announced that its rates will be increasing tomorrow. Coventry has also given notice to the market that fixed rates will be hiked with effect from Monday.
“The conflict in the Middle East has led to market expectation of higher inflationary pressure causing rate cuts to be slowed or put on hold. That pushes up the cost for lenders when pricing their fixed rate mortgages, which can force rates higher.
“Once we enter this cycle of lenders adjusting their rates, we know that it almost invariably results in others following suit. The current uncertainty means that this upward pressure doesn’t look likely to ease quickly, although there are signs that the market reaction is at least levelling off for now.
“In the short term, it’s likely that these increases will not see mortgage costs rocket but it does look like the improvements made in recent weeks could unwind quickly. With such an unpredictable backdrop, those borrowers that are considering a new fixed rate deal at the moment should be looking to secure the rate sooner rather than later.”
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