HSBC has first-time buyers firmly in its sights offering up to £2,000 in cashback from tomorrow and, brokers say, may well have just lit the fuse on a winter mortgage price war.
In a bid to support first-time buyers, HSBC has this morning announced that, from Wednesday, it will be increasing cashback amounts up to a maximum of £2,000 to help people with the cost of buying a home.
The lender has also announced it will be making a number of reductions across its residential and buy-to-let mortgage rates, though they will not be made public until tomorrow.
The reductions come as SWAP rates, which fixed rate mortgages are priced off, have this week fallen very slightly while traders are increasingly betting on a rate cut when the Bank of England next meets on 18 December.
Brokers welcomed the news after a sluggish run-up to the Budget for the property market.
Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, described the news as an aggressive and calculated market strategy by HSBC — but one that will benefit borrowers.
He said: “The £2,000 cashback is a brilliant move targeting cash-poor first-time buyers (FTBs). This cashback figure often covers most upfront completion costs, making the deal psychologically irresistible and instantly lowering the FTB affordability hurdle.
“Meanwhile, the pre-announcement of undisclosed rate cuts for residential and buy-to-let mortgages will position HSBC to capture a maximum influx of applications.
“Such a move from a lender of this size signals an aggressive intent to undercut competitors and start a mortgage price war. It’s a highly effective tactic for capturing immediate market share.”
Cash is king
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, was equally upbeat: “Cash is king and this move from HSBC will provide support to lots of first-time buyers. The costs of buying a home are often overlooked but they bite hard and cashback incentives like this can be of real value to aspiring homeowners. This could stimulate the market, especially if other lenders follow suit.”
Ben Perks, Managing Director at Stourbridge-based Orchard Financial Advisers, said HSBC have come out swinging after the Budget.
He added: “They are clearly keen to attract all the first-time buyers on offer in a final push for 2025. There’s always a lot of talk about how hard it is to save for a deposit, but on top of that there are a few grand in fees to be paid.
“The £2,000 on offer here will put a large dent in these upfront costs and, as long as the rates are competitive, HSBC will become the lender of choice for first-time buyers.”
Money is tight
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, also welcomed the news: “Money is tight for almost every first-time buyer so this kind of cashback is what borrowers want to see. After a quiet few months in the property market, this could provide invaluable support to some and get the market moving finally.”
Ranald Mitchell, Director at Norwich-based Charwin Mortgages, described the move as “a straight-up power play, giving buyers cash at the exact moment they’re financially stretched to breaking point”.
He continued: “With margins razor-thin, these boosts genuinely sway where borrowers go. Add in tomorrow’s rate cuts and it’s clear HSBC wants to dominate the first-time buyer market.
“The fight for new borrowers is exploding, and HSBC has just lit the fuse on a winter mortgage price war.”
