Mortgage Rates Fall: HSBC and Barclays Lead the Way

HSBC and Barclays have cut mortgage repayment rates, offering better deals for homebuyers. But what does this mean for the UK mortgage market?

Mortgage Rates Fall: HSBC and Barclays Lead the Way

As the UK mortgage market continues to evolve, two of the country’s largest lenders, HSBC and Barclays, have made significant cuts to their mortgage repayment rates. This move is expected to provide better deals for homebuyers, breathing new life into the market.

Rate Cuts Across the Board

HSBC has slashed over 140 mortgage rates, with new business residential rates cut by up to 0.18 percentage points. For existing homeowners looking to remortgage, rates have been reduced by up to 0.11 percentage points. One notable deal is a two-year mortgage for homebuyers with a 10% deposit and no fee, now offered at a rate of 5.57%, down by 0.11 percentage points.

Barclays has also joined the fray, reducing rates on several products, including loans for first-time homebuyers and existing homeowners looking to remortgage. A five-year fixed-rate mortgage for homebuyers with a 25% deposit is now available at 4.44%, a decrease from the previous rate of 4.73%.

A Mixed Bag for Homeowners

While these rate cuts may seem like a welcome relief for homeowners, the reality is more nuanced. According to financial information website Moneyfacts, some average fixed mortgage rates actually edged up on the day of the announcement. The average two-year fixed homeowner mortgage rate rose to 5.93%, up from 5.92% on the previous day. The average five-year fixed residential mortgage rate also increased, reaching 5.50%, up from 5.49%.

However, the choice of mortgages available to homeowners has increased, with 6,637 homeowner products now on offer, up from 6,521 the previous day.

A Boost for the Market?

Mark Harris, chief executive of mortgage broker SPF Private Clients, believes these rate cuts could stimulate activity in the market, saying: “This latest round of mortgage rate reductions from some big lenders is great news for borrowers. They come on the back of a decline in swap rates, which underpin the pricing of fixed-rate mortgages, over the past week. These cuts should give other lenders confidence to make similar reductions, which will stimulate activity and provide a welcome boost for the market.”

Mortgage rates have fallen, but what does this mean for homeowners?

HSBC has cut mortgage rates by up to 0.18 percentage points.