First major lender to cut mortgage rate is HSBC
HSBC has cut its mortgage rates, becoming the country’s first major lender to do so. The move, The Guardian says, could “spark a price war” in the months to come.
The banking firm, one of the biggest mortgage lenders in the country, has cut its rates across a range of residential and landlord buy-to-let mortgage products. The new rates first came into effect on Monday 5th January.
This follows a reduction in the base rate from the Bank of England in December to 3.75%. Mortgage brokers reportedly said it was a good news for borrowers, expecting rivals to follow.
“Many of the other big lenders will feel the need to also cut to remain competitive, which could result in a rate war,” independent financial adviser at Mint Wealth, David Stirling, told Newspage. “HSBC has set the tone for 2026 early. This is a real statement of intent and shows that they are keen to lend en masse this year. Will we see a January rate war as others undoubtedly join the fold?”
Around 1.8 million homeowners are expected to refinance a mortgage this year. Many of them are coming off super-low, fixed-rate deals, secured before interest rates began to climb at the end of 2021.
Financial data firm Moneyfacts reported that the average rate on a two-year fixed residential mortgage was running at 4.83%, with the average two-year, buy-to-let residential mortgage rate standing at 4.7%. Stirling says that sub 3.5% deals could be seen before the spring, “with any luck.”
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