April 25, 2024

Money latest: New energy price cap announced tomorrow with big drop predicted | UK News

HSBC has announced it will reprice its mortgage rates upwards from tomorrow – following similar moves by Santander, Coventry and TSB this week.

The lender hasn’t revealed how much rates are going up but the Money blog understands it will affect existing and new residential customers across all the main loan-to-value and fixed-term categories.

HSBC is the last major lender with a sub 4% deal – this now appears likely to go.

The apparent reason for these increases is that swap rates – which dictate how much it costs lenders to offer mortgages – have been creeping up.

There is a feeling markets may have got carried away with expectations of an early base rate cut this year – leading mortgage rates to fall. What seems to be happening now is a readjustment, with forecasts for a base rate cut having shifted back from May to June.

We’ve got some reaction from the industry.

Ashley Thomas, director at Magni Finance, told Newspage: “HSBC hiking rates is yet another hammer blow to Britain’s beleaguered property market. 2024 started on a high but those days now feel like a distant memory as more lenders reprice upwards.”

This sentiment was echoed by Michelle Lawson, director at Lawson Financial, who told Newspage: “Another one bites the dust. We have returned to uncertain times in the mortgage and property market. Hopefully things will settle down soon as the property industry is such a trigger for so many others. The yo-yoing is no good for anyone.”

David Hollingworth, associate director at L&C Mortgages, offered a more sanguine view, telling the Money blog…

“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.”

Offering advice to prospective borrowers, Mr Hollingworth said: “For now at least, anyone that was holding off in the hope of further cuts may want to reassess their position.”

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