Following the announcement that HSBC are set to release a number of product changes from 1 March, Newspage have shared the thoughts of Mortgage and financial experts.
David Conway, Director at Clayhall Financial Services Ltd: “The rollercoaster for borrowers continues and we just hit a sharp bend. Mortgage rates have been dropping in recent weeks and looked to have turned a corner but HSBC putting rates up is an indicator of what’s to come. Banks are paying over 4% to borrow, so to lend that out as a mortgage means they need to charge above that to make a margin. While rates are impossible to predict, speaking to a broker can cut through the time and research to find the best deal for you relative to your circumstances.”
Craig Fish, Director at Lodestone Mortgages & Protection:”Historically, lenders have withdrawn products and increased rates for a whole raft of reasons, one being to manage workloads. I suspect that this is the key reason behind these changes as they were one of the first lenders to go sub-4%, so I imagine that they are rather busy. That said, we have seen SWAP rates increasing this last couple of weeks, which is probably more down to uncertainty over inflation and energy price caps, and so they could also be bringing their pricing into line with the rest of the market until things settle again.”
Lewis Shaw, Founder & Mortgage Expert at Shaw Financial Services: “This was always going to happen and was easily predicted. With gilt yields and swaps having risen over the past few weeks, it was inevitable that the few lenders that went out to grab the headlines would come unstuck. The issue is how many mortgage holders have sat on their hands with the amount of social media guff about mortgage rate price wars and the number of consumers who will feel their expectations were woefully mismanaged. There’s nothing worse for consumer sentiment than feeling as though they’ve had the rug pulled from under their feet. But, as I’ve said countless times in the past few weeks, this is the new normal, and we need to ensure the public understands it.”
Justin Moy, Managing Director at EHF Mortgages: “Mortgage lenders have always managed their workloads by tweaking their rates up or down, depending on market conditions, so lenders that have poked their toes in the sub-4% sea have not stayed too long. This move likely reflects the fact swap rates have increased a little over the past few weeks, and other lenders are still reducing rates, so there will be occasions where we see some mixed messages. Again, this highlights why working with a broker will mean clients will have access to the wider range of deals and mortgage lenders, and make sure that the choice of deal is not just based on the rate, but it fitting your situation.”
Luke Thompson, Director at PAB Wealth Management: “My main feeling when HSBC released sub-4% interest rates a few weeks ago was that this was a quick rush for some business and that it probably wouldn’t last long term. I would not be surprised if they had some funds that they had purchased at a lower rate last summer and had been sitting on to enable them to release a rate that was cheaper than the base rate at the start of this year. I think this probably signals the end of the rate cuts we have seen in recent times as lenders will now start pitching their rates slightly above 4% again whilst they wait to see what happens with the base rate towards the end of the year.”
Rob Gill, Managing Director at Altura Mortgage Finance: “Having fallen steadily since the start of the year, it seems we’ve now reached the end of the current cycle of mortgage lender rate cuts. HSBC and other lenders are either pausing for breath or increasing rates now, meaning it could be a good time for borrowers to secure a competitive rate.”
Jonathan Burridge, Founding Adviser at We Are Money: “We are probably close to where rates will bottom out and they will bobble around as lenders manage pipelines and, of course, their funding. It is, in many ways, another sign of a return to “normal”. Just keep calm and carry on. There isn’t much to see here at the moment.”
