"It's early days, but competitive pricing for mainstream lenders is good to see, and long may it continue."
HSBC has announced rate cuts on selected two, three and five-year fixed rate products by up to 0.35% and is reintroducing cashback incentives across a selection of first-time buyer and home mover rates.
Highlights include a five-year fixed rate remortgage product, now available at 5.49% up to 60% LTV with a £999 fee.
A two-year fixed rate at 60% LTV has reduced to 5.94% with a £999 fee and £250 cashback, available for purchase including first-time buyers.
A five-year fixed rate first-time buyer product at 85% LTV has reduced by 0.20% to 5.64% with no fee and £500 cashback.
A HSBC UK spokesperson said: “We're firmly focused on supporting customers in the current environment. Following review, we are pleased to announce cuts to mortgage rates across our residential mortgage range in addition to reintroducing a cashback incentive of £500 on a number of deals.
“Rates have been cut on our residential mortgage range by 0.20% on average (between 0.05% and 0.35%). On top of this, our remortgage two and five-year deals are available with free legal fees or £300 cashback."
Newspage asked brokers for their responses:
Riz Malik, founder and director at R3 Mortgages, commented: "HSBC's latest move is admirable, and other major banks on the high street are sure to follow suit. TSB has also announced reductions on some of their fixed rates this morning, some by up to 0.4%. There is speculation that we are nearing the peak of interest rates rises, and the next inflation statistics on the 16th may provide further support for this view. Many lenders repriced fixed rate products downwards in the week before the base rate decision. Hopefully, this trend will continue."
Darryl Dhoffer from The Mortgage Expert, said: "Everyday I'm shuffling' springs to mind when I have seen rate reductions in recent days. Until we see consistent inflation reductions, we may not see consistent interest rate declines, though. It is no surprise lenders are introducing cashback deals to prop up profits if they have yet to play their cards on rate reductions. It's early days, but competitive pricing for mainstream lenders is good to see, and long may it continue. We just need to see more of it in the buy-to-let arena, which is suffering. The next few months of inflation figures will determine what trends we see in mortgage pricing. We are not out of the woods yet."
Jamie Lennox, director at Dimora Mortgages, added: "It's great to see HSBC leading the way with their second rate reduction in as many weeks. Hopefully this will spark a rocket within the other big 6 lenders who were fast to increase rates but seem to be dragging their heels on bringing them back down again. The next inflation data is going to be key to this downward trend continuing and with the energy price cap reducing in July we can pray there is some solid downward movement that will instill more confidence back into the market. However, we still walk a fine tightrope as if inflation doesn't meet the expected targets, we could quickly see rates rebound back upwards."
