HSBC Mortgage Product Rates Increase
It has been announced today that HSBC has increased mortgage product rates on 53 of its mortgage products, impacting many different areas of residential mortgage borrowing. Some of the customers expected to be impacted by the rate increases are existing customers looking to switch products, first-time buyers, home movers, and international residential mortgage borrowers. Affected mortgages span fixed terms of two and five years, with several products experiencing increases across multiple loan-to-value (LTV) bands. However, there are select decreases for some product types at lower LTVs. These changes come as markets remain fairly uncertain after the recent new Labour budget announcement. In this article we will run through the changes announced by HSBC and why the budget might have had an impact.
Key Changes For Existing Residential Mortgage Product Rates
Existing HSBC customers switching their mortgage deals or looking to borrow more will encounter higher rates on many two-year and five-year fixed products. Specifically:
- The 2-Year Fixed Fee Saver rate has decreased only for the 60% LTV product, while it has increased for the 70%, 75%, 80%, and 85% LTV bands.
- The 2-Year Fixed Standard product is seeing rate increases across the 60%, 80%, 85%, and 90% LTV bands.
- Across all five-year fixed products, including the 5-Year Fixed Fee Saver, 5-Year Fixed Standard, and 5-Year Fixed Premier Exclusive, rates are going up across most LTV bands, from 60% up to 95%.
Rate Changes For First-Time Buyers And Home Movers
For first-time buyers and home movers, HSBC has also implemented changes, with a mix of increases and decreases:
- Rates for 2-Year Fixed Fee Saver mortgages at lower LTVs (60%, 70%, and 75%) are now slightly reduced. However, customers taking on higher LTVs—such as 80%, 85%, and 95%—will experience rate hikes.
- For the 2-Year Fixed Standard product, the same pattern applies, with decreases at the 60%, 70%, and 75% LTV levels, and increases for those at 80%, 85%, and 90%.
- The 5-Year Fixed Fee Saver and 5-Year Fixed Standard rates have been raised across all LTV levels from 60% to 95%, adding to the cost burden for long-term borrowers.
Energy-Efficient Homes And Remortgaging Options
Over the last few years there has been a huge shift in property and property finance towards more energy efficient homes and green properties. In the budget specifically, there was a mention of more funding towards energy efficient property building however, customers in this category are not exempt from mortgage product rates increasing with HSBC:
- 2-Year Fixed Fee Saver and 2-Year Fixed Standard options have reduced rates for the 60%, 70%, and 75% LTV bands, while seeing increases at higher LTV bands.
- Across the board, 5-Year Fixed Fee Saver and 5-Year Fixed Standard products have experienced rate increases, extending from 60% to 95% LTV bands, affecting those who choose longer fixed terms.
Remortgage Customers Also Face Increases
In particular, 2-Year Fixed Fee Saver rates have risen for customers with 70%, 75%, and 80% LTVs.
- 5-Year Fixed Fee Saver and 5-Year Fixed Standard products, meanwhile, have seen similar increases, from 60% to 85% LTV.
- Cashback options for remortgage products are also included in this rate rise, with increases on the 2-Year Fixed Fee Saver and 5-Year Fixed Fee Saver offerings across various LTV levels.
International Mortgages Affected
HSBC’s international customers with residential mortgages are not left unaffected either in this mass rate adjustment. Rate increases also apply to:
- 2-Year Fixed Fee Saver and 2-Year Fixed Standard products, with changes applying across 60%, 70%, and 75% LTV bands.
- The 5-Year Fixed Fee Saver, 5-Year Fixed Standard, and 5-Year Fixed Premier Exclusive mortgages also see increases at the 60%, 70%, and 75% LTV bands.
Market Implications And Customer Considerations
In my eyes, it is pretty clear that HSBC’s latest rate adjustments reflect a response to ongoing economic uncertainty, influenced by fluctuating interest rates and inflation, and…..the recent budget announced by the Labour government. Until we start to see the real impact of the changes announced in the budget, it is likely that mortgage rates will continue to fluctuate. For borrowers considering HSBC’s products, these shifts should really highlight the importance of careful mortgage planning, especially as higher LTV options carry additional costs.
Speak To A Mortgage Advisor
First-time buyers and remortgaging customers may find themselves more affected by rising rates, but those seeking lower LTVs still have access to some of the lower-rate options. As HSBC and other lenders continue to recalibrate rates, it is so important to speak with a qualified, experienced, whole of market mortgage broker like ourselves at Oportfolio Mortgages. Call or email our team today to see how we can help you to secure the best product and rate for your circumstances.
