"This could feel like a retrograde step for borrowers but it is a far cry from the very rapid and steep increases that we saw post mini Budget and again last summer."
- David Hollingworth, associate director at L&C Mortgages
HSBC has repriced its mortgage rates, meaning there are no longer any sub-4% fixed rates on offer in the market.
HSBC had been the last lender offering a sub-4% five-year fixed rate at 3.99%, which has now increased to 4.15%.
The bank was the first 'big six' lender to bring back sub-4% mortgage rates at the start of January.
David Hollingworth, associate director at L&C Mortgages, commented: “HSBC has been offering rates that have been there or thereabouts for some time now and has so far held firm whilst other lenders have edged fixed rates up. That includes the leading benchmark rate for five-year fixed rates at 3.99%, the last five-year fix below 4%.
"There has been a large amount of pricing activity with lenders shifting rates regularly to adjust to the fact that markets now anticipate that base rate may take longer to fall than had previously been hoped. This has forced fixed rates back up as funding costs have risen leading to HSBC being the last lender standing in the sub 4% bracket. That may catch some borrowers by surprise when the rate story this year has generally been one of falling rates.
"This could feel like a retrograde step for borrowers but it is a far cry from the very rapid and steep increases that we saw post mini Budget and again last summer. Market rates aren’t skyrocketing in the same way that would force a sharp and significant rise in borrowing costs but it is enough that lenders are having to adjust in the face of higher funding costs. I expect there will still be plenty of jockeying for position as the market remains extremely competitive but in the short term we may still see more movement in mortgage rates.
"Of course, there remains an expectation for base rate to be cut this year but the question mark remains over when that may come. We may well see market rates bobble around as new data is revealed but for now at least anyone that was holding off in the hope of further cuts may want to reassess their position.”
