HSBC pulling last sub-4% rates as cost of funding fluctuates
HSBC will raise fixed-rate residential and buy-to-let loans tomorrow (23 February), which looks set to see the last of sub-4% prices withdrawn by mainstream lenders.
Virtually all sub-4% fixes have gone now, although some may still be available to existing borrowers. Many of the lenders don’t advertise their existing customer rates.
Santander was offering sub-4% five-year fixes, but when they were withdrawn, we knew it was only a matter of time before HSBC announced it was pushing up its prices.
Aaron Strutt, product director at Trinity Financial, says: "The sub-4% rates have been really popular and have helped stimulate the market. We are likely to see fixed mortgage pricing fluctuate this year as the cost of funding changes.
"Mortgages are still reasonably priced even with the rate hikes we have seen over the last few weeks. Two-year fixes start at 4.38%, and the lowest five-year fix is just over 4.1%.
"There is still an expectation rates will be lower over the near term, but clearly, there are no guarantees. Some lenders are seeing a reversal in the number of people taking five-year fixes as they opt for two-year deals instead. Many borrowers still take five-year fixes because the rates are lower, but they also think it is worth paying for the payment security."
NatWest also raising mortage rates
NatWest is also raising its two and five-year fixes for new and existing mortgage customers with effect from 23rd February 2024. The rates are rising by up to 0.20%.
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The information contained within was correct at the time of publication but is subject to change.
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