HSBC Revamps Mortgage Criteria: A Game-Changer for Homebuyers

HSBC UK has announced significant changes to its mortgage criteria, effective July 10, which will allow customers to access higher lending amounts at a higher loan-to-value (LTV) ratio. The move is expected to have a profound impact on the UK mortgage market, with industry experts predicting a frenzy of activity in the second half of the year.

New mortgage rules take effect on July 10

According to Chris Pearson, HSBC UK’s head of intermediary mortgages, the new rules will enable the bank to help more customers achieve their home-buying goals. “The affordability of a mortgage remains at the heart of any mortgage decision, but by increasing the maximum amount of money that can be borrowed as part of a home purchase or remortgage, we will be able to help more customers,” he explained.

The changes will see the removal of the 65% and 80% LTV tiers, allowing customers to borrow more at a higher LTV ratio. In some cases, the maximum amount that can be borrowed on a house has increased by over 150%.

Industry experts have welcomed the move, with Riz Malik, director at R3 Mortgages, predicting a busy second half of the year. “The UK mortgage market seems to be getting ready for a frenzy of activity,” he said. “If the Bank of England gives us good news on August 1, the rest of 2024 could be stellar.”

Mortgage applications set to surge

Rohit Kohli, Director at The Mortgage Stop, believes the changes signal HSBC’s confidence in the direction of the market. “This is just as big news as interest rate reductions and often gets missed by borrowers when considering their mortgage options,” he said.

Emma Jones, managing director at Whenthebanksaysno.co.uk, agreed, stating that the changes will give homeowners a real boost. “Rate cuts often dominate the headlines, but today it’s the turn of criteria. Hats off to HSBC,” she said.

Simon Bridgland, director at Release Freedom, added that the market is shaping up to be very busy in the second half of the year. “The seemingly small change for HSBC will send echoes around the market about its belief in the sector, as will the rate drops we are seeing hourly at the moment,” he said.

Homebuyers set to benefit from HSBC’s new mortgage criteria

Overall, HSBC’s decision to revamp its mortgage criteria is expected to have a significant impact on the UK mortgage market. With experts predicting a busy second half of the year, homebuyers may want to take advantage of the new rules to achieve their home-buying goals.