by ITM Ventures 
HSBC, a prominent UK lender, has recently unveiled comprehensive mortgage interest rate cuts, aligning with other major players in the industry. Notably, reductions of up to one percentage point have been announced by leading financial institutions.
The bank’s latest offerings, disclosed on a Wednesday, feature a headline-grabbing five-year fixed remortgage deal at 3.94%, catering to those borrowing up to 60% of the property value. Moreover, starting Thursday, HSBC’s two-year fixed remortgage rate is set to dip below 4.50% for the first time since early June last year, reaching an enticing 4.49%, specifically for those with at least 40% equity in their homes.
For those contemplating a more extended commitment, HSBC is now presenting a 10-year fixed-rate deal starting at 3.99%, reflecting the bank’s confidence in a further decline in interest rates.
These rate cuts follow Halifax, the largest mortgage lender in Britain, reducing the price of its two-year fixed-rate remortgage from 5.64% to 4.81% on a recent Tuesday. Opting for this new rate on a £200,000, 25-year mortgage would translate to a substantial monthly repayment reduction from £1,245 to £1,147, leading to savings of £98 per month or £1,176 annually.
The wave of rate cuts extends beyond the major players, as Leeds Building Society and several smaller, specialised lenders have also announced reductions.
Many homeowners who secured new mortgages last year experienced a doubling of their monthly repayments as they transitioned from previously inexpensive deals. However, industry experts anticipate up to four Bank of England interest rate cuts in 2024, prompting lenders to initiate reductions in fixed-rate offerings.
David Hollingworth, Associate Director at L&C Mortgages, views these latest deals as some of the most competitive since the surge in rates last summer. Hollingworth acknowledges that while borrowers approaching the end of their current fixed rates may still face payment increases, the newly introduced lower rates will help alleviate the impact.
The significance of HSBC’s move lies in its offering of competitive rates to borrowers seeking to remortgage, departing from the recent trend that favoured those relocating.
Simon Bridgland, a director at the mortgage broker Release Freedom, anticipates an active week of rate cuts, indicating a positive shift for prospective mortgage buyers.
The mortgage market faced challenges in the previous year, marked by the aftermath of Liz Truss’s infamous mini-budget in autumn 2022. However, homeowners received a boost recently as swap rates plummeted following data revealing November’s inflation rate at a lower-than-expected 3.9%.
