HSBC will introduce a new fixed-rate product for high earners and launch a range of residential rate cuts on Monday.
The high street bank will debut a two-year premier exclusive range with a £999 fee for most residential, purchase, remortgage and existing customers,
The announcement came in a note to brokers without giving further details. Applications are open to UK and international customers.
It will also reduce the booking fee for its five-year premier exclusive range to £999.
Among other changes, the lender will also cut a range of UK five-year residential home mover, first-time buyer, remortgage and switching fixes from 70% loan to value to 90% LTV.
Its five-year international premier exclusive options at 70% LTV and 75% LTV will also fall.
The bank says its product finder tool and sourcing systems will be updated on Monday.
John Charcol mortgage technical manager Nicholas Mendes says: “HSBC has announced a fresh round of mortgage rate reductions specifically tailored to individuals meeting the Premier eligibility criteria, helping to limit any potential impact on service levels.
“Eligibility requires an annual income of at least £100,000 paid into an HSBC Premier Bank Account or savings or investments of £100,000 or more with HSBC in the UK.”
He adds: “HSBC premier clients already enjoy some of the best buy purchase rates in the market, and these latest repricing further solidifies its position across the 70% LTV to 90% LTV range.”
The bank’s reductions are eye-catching as swap rates have risen over the last month or so, and may lift further due to the current turmoil in the bond markets.
Two-year swap rates rose to 4.306% on 8 January from 4.046% a month ago, while five-year rates lifted to 4.168% from 3.767% over the same period, according to Chatham Financial.
Mendes points out: “This move is particularly notable in a period where swap rates have been rising, defying expectations.
“While most lenders have not significantly raised their rates in response to recent increases in swaps, the pressure to do so is mounting.
“Swap rates, which heavily influence mortgage pricing, have been steadily increasing, narrowing the gap between them and the lower LTV best mortgage deals available.
He adds: “Lenders appear to be holding back on rate increases to avoid unsettling the market, but this restraint is unlikely to last indefinitely.
“If swap rates continue to rise, it inevitable that mortgage rates will have to give at some point, as lenders cannot absorb higher costs indefinitely.”
