HSBC slashes mortgage deal costs in 'start of another rate war'

HSBC branch in London

HSBC branch in London

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Jack Walters

By Jack Walters


Published: 26/07/2023

- 11:18

The bank hopes more lenders will follow in its footsteps in a much-needed boost to homeowners

HSBC has announced its residential fixed rate products are being cut as swap rates continue to tumble.

The move makes the bank the first high street lender to reduce its mortgage rates.


Two, three and five-year fixed fee saver, fixed standard and premier exclusive are among deals which will have their rates reduced from today.

Tracker standard products at up to 90 per cent loan-to-values on the lender’s residential first-time buyer and home mover products, residential mortgage and international residential purchases ranges have also been impacted.

An image of houses in West London

An image of houses in West London

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In a statement, HSBC told GB News: “We’re firmly focused on supporting customers in the current environment.

“Following review, we are pleased to announce cuts to mortgage rates across our residential mortgage range in addition to reintroducing a cashback option of £300 on a number of deals.”

The bank confirmed the residential mortgage range will receive a cut of around 0.15 per cent.

HSBC’s remortgage two and five year deals are also available with free legal fees or a cashback.

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Cash machines at HSBC

Cash machines at HSBC

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Accord Mortgages have meanwhile announced a 0.45 per cent reduction on its residential fixed rates from tomorrow.

Yorkshire Building Society’s intermediary-only subsidiary is also enabling clients to borrow more using its LTI feature.

Justin Moy, managing director at EHF Mortgages said: “After HSBC, Accord is probably the largest lender to make a move on their rates.

“I think any reductions will be small, and it may be short-term pending the impact of the base rate increases we all expect in the coming weeks.

The Bank of EnglandThe Bank of EnglandPA

“Seeing the first high street lenders ‘blink’ and reduce rates across their residential products is great news.

“There is plenty of pressure on others to follow now, as applications will follow the cheaper rates.”

However, Kylie-Ann Gatecliffe, director at KAG Financial, warned that this could be the “start of another rate war, similar to the one we saw early this year after the disaster that was the mini-budget.”

She added: “As we have seen other lenders reduce their rates over the past week, now that the high street lenders are involved, I do believe we will see more of this.

“They may not fall rapidly, as this could also shake the market, but a reduction at a time when people are worried about mortgage payments is a step in the right direction.”

Jeremy HuntJeremy Hunt succeeded Kwasi Kwarteng as Chancellor after last autumn’s mini-budgetPA

Mortgage rates have rapidly increased in recent months as the Bank of England continues to grapple with Britain’s persistently high inflation figure.

Traders have even predicted the Bank will have to increase the base rate to 6.25 per cent after the consumer price index dropped almost one point to 7.9 per cent.

Chancellor Jeremy Hunt last month unveiled measures to assist struggling homeowners.

Hunt met with high street bank lenders in Downing Street to thrash out a support package.

The Chancellor agreed with firms to implement a 12-month minimum before repossessing homes.

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