It’s cause for celebration for homeowners all over the UK. HSBC only this morning announced a new wave of mortgage rate reductions, with new rates available at below 4%. This move is in direct response to about 200 bps drops in the on-the-run swap rates. The latest inflation news was positive, with November’s inflation rate coming in below expectations at 3.9%. Consequently, the mortgage market is seeing some great competitive offers such as HSBC’s new 10-year fixed-rate offer from just 3.99%.
David Hollingworth, an associate director at L&C Mortgages, said that he noted that today’s agreements represent some of the lowest interest rates we’ve seen since last summer’s increases on interest rates. He spoke to the speed of changes happening inside the market. These cuts are not only the latest shot to traverse a rapidly accelerating and dynamic market,” he said.
Alongside HSBC’s launches, Leeds Building Society and a host of other smaller lenders have unveiled cuts. This wave of cuts represents a change in the mortgage environment. Providers have begun to change their offers in expectation of the first interest rate cuts from the Bank of England in 2024. In fact, some say there may be as many as four cuts in 2024 already leading lenders to sharpen their pencils and get more competitive.
HSBC has launched a new two-year fixed-rate remortgage. For the first time since early June of 2022, this rate has fallen below 4.50%, currently sitting at 4.49% for borrowers with at least 40% equity in their home. If you’re considering a £200,000 mortgage over 25 years, you’ll stand to benefit by the bottom line on the new rate. It reduces your monthly repayments from £1,245 to £1,147 – £98 per month or £1,176 each year.
These new rates offer crucial breathing room to struggling borrowers. Yet those who come to the end of their fixed-rate deals this year will still face higher monthly payments. While the lower rates will reduce some of the anger from these upcoming increases, they can’t be avoided.
Director at the mortgage broker Release Freedom, Simon Bridgland is predicting a “manic week” in prospect. He’s hoping that lenders will lead and follow market conditions by jumping up to telegraph more rate cuts to come. The mortgage market has been under significant stress in the last year. The consequences of Liz Truss’s mini-budget in the autumn of 2022 rocked the market beyond recognition.
As the landscape shifts and rates decline, homeowners and prospective buyers alike are urged to remain vigilant and consider their options carefully. Better rates are coming around the bend. This would put millions more Americans in a stronger position to obtain advantageous mortgage terms.