First major lender to cut mortgage rates
HSBC is the first high-street lender to recently announce they are reducing their mortgage rates, signalling a possible end to the chaos in the mortgage market. The bank has decided to cut rates across all its residential products. While the exact percentage of the decrease was not disclosed, the new rates will come into effect starting tomorrow.
This move comes in the wake of positive news on the cost-of-living crisis, with the rate of inflation falling faster than expected to 7.9% last week. As a result, expectations for the Bank of England’s interest rate hikes have been scaled back by City traders. The market now anticipates interest rates peaking at 5.75%, a notable reduction from the earlier prediction of 6.75%.
HSBC’s decision to reprice its mortgages reflects a positive trend in the market, with other lenders like specialist lender Accord also reducing their rates after months of increases. This development is encouraging for potential homebuyers as cheaper rates may stimulate more mortgage applications.
Reported by the Evening Standard, Justin Moy, managing director at EHF Mortgages, said: “Seeing the first High Street lenders ‘blink’ and reduce products across their residential products is great news. “There is plenty of pressure on others to follow now, as applications will follow the cheaper rates. Perhaps Santander can reverse their decision to increase rates and fall back in line, too?”
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