Lender to raise pricing for first-time buyers, home movers, remortgagors and international clients
HSBC will increase pricing on a wide range of fixed-rate mortgage products from tomorrow, Feb. 4, affecting both UK and international borrowers.
The changes will apply to first-time buyers, home movers and remortgage customers, as well as to selected international residential and remortgage products.
Both two- and five-year fixed rates are set to rise, covering standard and fee saver products across multiple loan-to-value (LTV) tiers. The lender’s green propositions for homes with an ‘A’ or ‘B’ energy performance certificate (EPC) rating are also included in the repricing.
For first-time buyers, standard and fee saver two-year fixes will increase at 60%, 70%, 75%, 80%, 85%, 90% and 95% LTV. Five-year fixed options for this segment will also see higher rates at a number of LTV bands.
Home mover products will follow a similar pattern, with rate rises on two-year fixed deals and on selected five-year fixes.
Remortgage customers, including those using cashback options or energy-efficient products, will face higher two- and five-year fixed rates at 60%, 70% and 75% LTV.
International residential and remortgage borrowers will see increases on certain two- and five-year fixed products.
HSBC is the third major lender to confirm a rate increase this week, following fixed rate hikes announced yesterday by both Nationwide and Santander.
Commenting on the broader market, Nicholas Mendes, mortgage technical manager at John Charcol, said that lenders’ recent moves underlined the sensitivity of pricing to funding costs. “Recent rate increases from lenders are a reminder that mortgage pricing can change quickly, even when this week’s Bank of England decision is widely expected to be a hold,” he said.
“Fixed mortgage rates are influenced less by the base rate decision on the day, and more by what is happening in swap rates, which lenders use as a guide to their longer-term funding costs. Swap rates have edged higher recently, so some lenders are reflecting that in their pricing. If swaps remain elevated, it would not be a surprise to see other high street lenders follow with similar repricing over the coming days.
The key point for borrowers, Mendes stressed, is that a base rate hold does not automatically mean mortgage rates fall. “If funding costs rise, mortgage rates can move up, even with no change from the Bank of England,” he said.
“In the near term, it would be sensible to expect smaller, more incremental moves rather than significant reductions over the next few weeks. Competition will still exist, but pricing is likely to remain changeable as lenders respond to funding costs and demand.
“If your fixed rate ends in the next six months, it is worth reviewing your options now rather than later. Many lenders allow borrowers to secure a new deal well ahead of time, and a broker can help compare the true overall cost, navigate criteria, and keep the application under review so you can move quickly if pricing improves.”
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