HSBC will cut residential and landlord rates across hundreds of products tomorrow (26 June), following recent reductions from two other major lenders, with more firms set to follow, according to some brokers.
The high street bank will introduce a range of offers across two-, three- and five-year terms, at a range of ratio values for new and existing customers.
A HSBC spokesperson says: “We are firmly focused on helping customers onto or up the property ladder.
“There are a number of factors that are taken into account when setting mortgage rates, and following a review, we are reducing over 300 mortgage rates across our residential and buy-to-let mortgage ranges, from tomorrow.”
HSBC follows Barclays and NatWest to become the latest lender to bring down home loan costs.
On Monday, Barclays announced rate cuts of up to 31 basis points for home buyers, while last week NatWest said it would reduce rates by 17bps.
Also, last week, the Bank of England held Bank rate at 5.25% for the seventh meeting in a row despite inflation falling to its target of 2% in May.
John Charcol mortgage technical manager Nicholas Mendes points out: “Following last week’s Monetary Policy Committee decision and with important wage data and general election results on the horizon, markets are likely to anticipate further reductions in bank rates.
“On Friday, the five-year money rate was at 3.82%, indicating that lenders certainly have room to lower five-year fixed rates even further from their current levels.
“Interestingly, last week saw Sonia swaps holding steady at 5.2% since 7 May — the longest stable period since the benchmark’s inception in 1997.
“This stability has enabled lenders to avoid continuous repricing and focus on enhancing their service levels in preparation for the next repricing battle, reminiscent of earlier this year.
Mendes adds: “Given that most recent lender repricing has involved increases, there is now potential for reductions.
“We’ve seen some movement but this latest reprice from HSBC is certainly going to spur on the market.
“The timings of competitor repricing similar to earlier in the year will likely be from next week, considering the forthcoming announcements.”
