HSBC has announced significant reductions across its mortgage offerings, effective from tomorrow (16 April) as part of a broader move by UK lenders to attract borrowers in a competitive market.
The rate cuts encompass a wide range of products, including residential and buy-to-let mortgages for both new and existing customers. Notably, two- and five-year fixed-rate deals, as well as energy-efficient mortgage options, will see decreased rates across various loan-to-value (LTV) tiers, extending up to 95% LTV.
This initiative aligns with actions from other major lenders. The Co-operative Bank is also adjusting its rates, with reductions of up to 0.26 percentage points on selected two- and three-year fixed deals for homebuyers, and up to 0.18 points for remortgagers.
In tandem with rate reductions, several banks, including Halifax and Lloyds, are easing affordability criteria. By lowering stress test rates, these changes enable borrowers to qualify for larger loans, potentially increasing borrowing capacity by approximately 13%. For instance, a household with a £75,000 income could now borrow up to £324,000, compared to £286,000 previously.
These developments occur against a backdrop of shifting economic conditions, including recent trade tensions and adjustments in interest rate expectations. The Financial Conduct Authority has also highlighted concerns that overly stringent lending criteria may have been limiting access to affordable mortgages.
