SBC has become the first high-street lender to cut its mortgage rates, in the clearest sign yet that mortgage mayhem appears to be coming to an end.
The banking giant is to cut its rates across the spectrum of residential products it offers. Currently a five-year deal with a 90% LTV is priced at 6.04%.
HSBC did not reveal the size of the decreases, which will come into effect tomorrow.
The repricing follows last week’s long-awaited good news on the cost-of-living crisis, when the rate of inflation fell more quickly than expected to 7.9%.
That prompted City traders to pare back their expectations for how far the Bank of England will need to raise interest rates over the next year. The market now expects rates to peak at 5.75%, well below the peak of 6.75% predicted earlier this month.
Now, those hopes of less rate rises have started to filter through to the mortgage market, with HSBC joining specialist lender Accord in bringing its rates down after months of increases.
Justin Moy, managing director at EHF Mortgages, said: “Seeing the first High Street lenders ‘blink’ and reduce products across their residential products is great news.
“There is plenty of pressure on others to follow now, as applications will follow the cheaper rates. Perhaps Santander can reverse their decision to increase rates and fall back in line, too?
“We are still right to be nervous, though, given the impending base rate increases on the horizon and the fact that plenty of things can change the mood of the markets on a dime. However, this was a welcome email in my inbox this morning.”
Jamie Lennox, director at Dimora Mortgages, noted that HSBC’s prices are generally lower than those of the other top lenders, meaning that its rivals will be especially likely to follow suit.
But he also warned that prices are still much higher than they had been in years.
He said: “Mortgage holders will still need to be mindful that the rates on offer will likely be more expensive than they have become accustomed to in recent years.”