HSBC is implementing significant rate changes across its mortgage offerings, effective from 22nd October.
- Adjustments impact residential and buy-to-let (BTL) mortgages, including first-time buyers and remortgages.
- The changes reflect both rate increases and decreases across different loan-to-value (LTV) tiers.
- The strategic move aligns with similar actions from other major lenders responding to market volatility.
- Notably, lower LTV products face hikes, while mid-tier borrowing becomes more attractive with reduced rates.
HSBC is set to introduce a series of adjustments to its residential and buy-to-let mortgage product ranges, effective from 22nd October. These changes are widespread, affecting various mortgage categories such as first-time buyers, home movers, remortgages, and international customers, as the bank recalibrates its offerings in line with market conditions. Specifically, existing residential customers wishing to switch or borrow more will see reductions in the 2-year fixed standard mortgage at 80% and 85% LTV ratios.
For first-time buyers and home movers, the adjustments are varied. While 2-year fixed Fee Saver and standard products at 60% LTV will experience an increase in rates, those at 80% and 85% LTV will see a decrease. High-value mortgages at 60% LTV will also encounter rate hikes. Conversely, 5-year fixed products across all LTV tiers, including Fee Saver, Standard, and Premier Exclusive offerings, are set to increase, impacting both affordability and long-term financial planning.
Customers with energy-efficient homes, specifically those with A or B Energy Performance Certificate (EPC) rated properties, will notice increases in 2-year and 5-year fixed Fee Saver and Standard products at lower LTVs, while products at 80% and 85% LTV will experience decreases. In the residential remortgage range, 2-year fixed Fee Saver mortgages at 60% LTV will face rate increases, but rates for higher LTVs, such as 85% and 90%, will decrease. High-value mortgage products are also scheduled for rate increases at lower LTV tiers, while Premier Exclusive products at higher LTVs will see reductions.
For those remortgaging energy-efficient homes, similar increases and decreases in rate will apply. HSBC’s Residential Remortgage Cashback offers largely follow the same pattern, with 2-year and 5-year fixed Fee Saver and Standard products at lower LTVs increasing in cost. However, those at higher LTV ratios will witness reductions, thereby creating a varied landscape of affordability for different categories of borrowers.
In the buy-to-let remortgage range, HSBC is reducing rates across the board for 2-year fixed Fee Saver and standard products at 60%, 65%, and 75% LTV. This move is indicative of HSBC’s broader strategy to remain competitive in the buy-to-let market, which has shown resilience amidst fluctuating economic conditions.
International customers are not exempt from these changes. Both 2-year and 5-year fixed products for residential properties will see rate increases, including Fee Saver and Standard products at 60% to 75% LTV. International buy-to-let mortgage rates will also increase, affecting both Fee Saver and Standard options, highlighting HSBC’s response to international market dynamics.
HSBC urged brokers and borrowers to submit applications in full by midnight on 21st October. The bank’s product finder tool and sourcing systems will be updated accordingly on 22nd October, ensuring stakeholders are equipped with the latest information to make informed decisions. Nicholas Mendes, mortgage technical manager and head of marketing at John Charcol, commented on HSBC’s latest mortgage rate changes: “HSBC’s latest mortgage rate changes reflect a strategic and varied approach, with a mix of increases and decreases across its product lines. The reductions in the 2-year fixed Standard products at 80% and 85% LTV suggest a focus on making mid-tier borrowing more attractive, particularly for homeowners looking to remortgage.”
These adjustments by HSBC signify a strategic response to market conditions, balancing increased rates at lower LTVs with reduced rates for mid-tier borrowers.
