HSBC Holdings PLC (LSE:HSBA) began offering new mortgages again on Thursday, after pulling products from the market twice in one week.
A standard three-year fixed-rate 75% loan-to-value mortgage from the FTSE 100 lender now comes with a 5.09% interest rate, according to HSBC’s website.
For a five-year standard deal, HSBC now charges interest at 4.89%, with the rate rising as high as 5.29% for a standard two-year fix, with the average hike marking a 25-basis point rise.
“Higher rate expectations have been priced into fixed-rate mortgages, which have risen quickly since inflation figures in May,” Hargreaves Lansdown analyst Sarah Coles explained.
HSBC had initially pulled mortgage deals from the market on Friday, with Monday’s new offerings then being scrapped on Wednesday as anticipation builds over further prospective Bank of England rate hikes.
“Over recent days the cost of funds has increased and, like other banks, we have to reflect that in our mortgage rates,” an HSBC spokesperson commented on Wednesday.
Across the UK, average five-year fixed mortgage rates sat at 5.56% on Thursday, up from Tuesday’s 5.51%, according to Moneyfacts.
Two-year fixed rates rose from 5.86% to 5.92% during the same two-day period, meanwhile.
Rival banks have toyed with interest rates too, with Santander and Coventry Building Society among those to reprice mortgages over the past week.
Nationwide Building Society is poised to up fixed mortgage rates on Friday by as much as 0.7% meanwhile, with the lender's two-year fixes set to be priced at 5.69%, up from 5.24% currently.
Most homeowners will still be on sub-2% fixed mortgages, Coles added, though she warned the additional costs from higher rates when it comes to mortgaging is likely to send 88% of these into financial difficulties.
“We’ve seen HSBC raise rates twice in a week,” she continued, “this won’t be the last of it”.