HSBC withdraws from mortgage market
UK lender HSBC has taken the decision to temporarily cease accepting new applications for mortgages. This means their entire range is unavailable to new borrowers until Monday 12th June at the earliest.
This decision has been driven by a massive wave of new applications, as buyers try and secure low fixed rate deals before rates rise. The Bank of England looks set to approve a 13th interest rate rise later this month, which will have a big impact on UK mortgages.
In this section:
- Why have HSBC pulled mortgage deals?
- Will this affect existing HSBC customers?
- Are HSBC likely to increase mortgage rates?
- Will UK mortgage rates continue rising?
- Need mortgage advice?
- Recent mortgage news
Why have HSBC pulled mortgage deals?
HSBC has chosen to temporarily remove themselves from the market to ensure business stability. With an overwhelming demand for new mortgages, this was the best way for HSBC to manage their existing workload and customer service enquiries.
HSBC have however been widely condemned for how fast they decided to withdraw their mortgage range. Many mortgage brokers had around 4 hours’ notice, and HSBC decided to pull products in as little as 2 hours. This had a huge impact on those mortgage brokers attempting to submit applications yesterday.
HSBC is expected to return to the market next Monday (12th June 2023). It is likely that during this time HSBC will be re-evaluating their range. There is increasing pressure on lenders to increase their mortgage rates, with Nationwide already announcing an increase as of next week.
Will this affect existing HSBC customers?
If you already have a HSBC mortgage, this removal from the market will have no effect on your current mortgage. However, it would be wise for variable rate mortgage customers to brace themselves for higher repayments.
HSBC will be assessing their current mortgage offerings and how well they fit into the market. It is possible rates will climb for current customers if they are on variable, discount or tracker mortgages.
HSBC customers with a fixed rate deal should be able to avoid increasing rates for now. If your special rate period is coming to an end this year, it may be wise to consider a remortgage or product transfer. This can allow you to dodge higher rates, or you risk higher repayments when you are switched over to HSBC’ standard variable rate.
Are HSBC likely to increase mortgage rates?
There is a good chance HSBC will choose to increase their rates following their break from the market. This could include fixed rates for new mortgages, as well as their own standard variable rate (SVR).
Tracker rate mortgage customers will also want to keep an eye out for updates from the Bank of England on the 22nd of June. On this date, the Monetary Policy Committee will review the current state of the economy and decide whether another rate rise is necessary.
Will UK mortgage rates continue rising?
Mortgage rates may not reduce significantly over the rest of 2023, but the market changes consistently. If the government reduces inflation to a manageable level, it is possible the Bank of England will lower the UK’s base interest rate.
Need mortgage advice?
If you are worried about your HSBC mortgage, or simply need some advice, speak to one of our highly skilled mortgage experts.
Our specialists can provide you with a FREE mortgage review and access to top rates from OVER 50 UK LENDERS. Whether you need a simple remortgage or your needs are more complex, our team can find the right deal and help you save time and money.
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