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HSBC and Natwest up rates, with sub-four per cent deals off the market

  • 22/02/2024
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HSBC and Natwest up rates, with sub-four per cent deals off the market
HSBC will increase a range of residential and buy-to-let (BTL) rates from tomorrow, with sub-four per cent rates temporarily retreating from the market.

The move comes after Santander increased all residential and BTL fixed rates in its new business range – along with select product transfer rates – earlier this week, leading to the removal of sub-four per cent deals.

The lender is increasing rates across its existing residential customer switching, existing residential customer borrowing more, residential first-time buyer and home-mover, residential remortgage, residential remortgage cashback, international residential, existing BTL customer switching and borrowing more and BTL purchase and remortgage deals.

The full details will be confirmed tomorrow.

Natwest will also increase rates from tomorrow, with new business purchase and remortgage rates going up by 0.15 per cent on selected two- and five-year deals.

Shared equity purchase selected two- and five-year rates will go up by 0.1 per cent, along with Help to Buy share equity products.

On the green purchase and remortgage side, selected two- and five-year deals will rise by up to 0.1 per cent.

In its existing customer range, rate increases of up to 0.15 and 0.2 per cent will be applied on selected two- and five-year deals.


‘Sub-four per cent deals will be off the cards temporarily’

Nicholas Mendes, mortgage technical manager and head of marketing, said that HSBC’s latest reprice was “inevitable following competitor movements in recent days”.

He said: “Having the best buy rate over a weekend is risky business, as this would have resulted in being overwhelmed with applications. Expect we will have a few weeks of mortgage rate adjustments, as lenders will be busy balancing margin and volume to ensure this latest hiccup in rates doesn’t dampen the new year demand.

“Sub-four per cent deals will be off the cards temporarily, but once some positive data feeds back into the market confidence, pricing will slowly edge back down.”

David Hollingworth, associate director at L&C Mortgages, said: “HSBC has been offering rates that have been there or thereabouts for some time now and has so far held firm whilst other lenders have edged fixed rates up. That includes the leading benchmark rate for five-year fixed rates at 3.99 per cent, the last five-year fix below four per cent.

“There has been a large amount of pricing activity, with lenders shifting rates regularly to adjust to the fact that markets now anticipate that base rate may take longer to fall than had previously been hoped.

“This has forced fixed rates back up as funding costs have risen, leading to HSBC being the last lender standing in the sub-four per cent bracket. That may catch some borrowers by surprise when the rate story this year has generally been one of falling rates.”

He added: “This could feel like a retrograde step for borrowers, but it is a far cry from the very rapid and steep increases that we saw post mini Budget and again last summer. Market rates aren’t skyrocketing in the same way that would force a sharp and significant rise in borrowing costs, but it is enough that lenders are having to adjust in the face of higher funding costs.

“I expect there will still be plenty of jockeying for position, as the market remains extremely competitive, but in the short term, we may still see more movement in mortgage rates.

“Of course, there remains an expectation for base rate to be cut this year, but the question mark remains over when that may come. We may well see market rates bobble around as new data is revealed, but for now at least, anyone that was holding off in the hope of further cuts may want to reassess their position.”

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