HSBC has announced that it is reducing its mortgage rates next week as brokers hailed the “statement of intent” of “the first lender to show their hand in the New Year”.
With effect from Monday 5th January, HSBC is making a number of reductions to its residential and buy-to-let mortgage rates, it has been announced.
This comes as Newspage experts predicted sub-3% mortgages by the end of 2026 – while house prices fell by 0.4% month on month from November to December, Nationwide HPI said.
Brokers said HSBC’s announcement was good news for borrowers, so soon after the New Year, and could spark a rates war between lenders.
Out of the blocks early in 2026
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth Ltd, said he expects mortgage rates will be sub-3.5% before winter is over.
He added: “HSBC are out of the blocks early in 2026 with sweeping reductions across all their residential products.
“This is certainly good news for borrowers as many of the other big lenders will feel the need to also cut to remain competitive, which could result in a rate war. We could potentially see sub-3.5% deals before the spring with any luck.”
Ben Perks, Managing Director at Stourbridge-based Orchard Financial Advisers, said HSBC is out the blocks of 2026 with a competitive reduction.
He continued: “HSBC set the tone for 2026 early. They have announced decreases to interest rates across the board.
“This is a real statement of intent, and shows that they are keen to lend en masse this year. Will we see a January rate war as others undoubtedly join the fold?”
HSBC are the first lender to show their hand in the New Year
Elliott Culley, Director at Hayling Island-based Switch Mortgage Finance, said the first reduction of 2026 will no doubt be followed by HSBC’s rivals.
He added: “HSBC are the first lender to show their hand in the New Year and have decided to make sweeping changes to their products.
“Rate reductions are expected from mortgage lenders in the wake of the base rate cut in December so I would expect more lenders to make changes in early January.”
Kundan Bhaduri, Entrepreneur, Investor and Landlord at London-based The Kushman Group, said nearly two million will be seeking new deals this year.
He continued: “Monday’s timing for this rate reduction by HSBC is perfect. Markets are expecting the Bank of England Rate to fall to 3.25% by year end. We can also see that swap rates are trading at their lowest levels since early 2022. HSBC seems to be positioning itself to capture quality borrowers before the spring rush begins.
“Around 1.8 million borrowers need to refinance this year, many rolling off ultra-cheap deals secured before rates climbed in 2022, creating a massive captive market for competitive lenders. However, I do not expect these low rates to last forever.
“Mortgage pricing wars rarely benefit latecomers, and anyone serious about borrowing should secure applications before rival lenders inevitably respond with their own new rates.”
