HSBC has opened 2026 by becoming the first major mortgage lender to make a decisive move on mortgage pricing. As many in the market had been anticipating they have made a round of notable downward rate cuts (which come into effect on 5th January). In the weeks ahead, this is likely to intensify competition between the main lenders.

Following the Bank of England’s base rate cut in December to 3.75%, mortgage brokers said it was good news for the New Year for borrowers. Rival lenders are likely to follow suit. Rates will be lowered on its UK residential existing customer switching range, including the two-year fixed fee saver and the five-year fee saver. The Bank has also lowered rates on first-time buyers, residential home movers, re-mortgage buy-to-let and international products.

Securing lenders before the busy spring Market

Industry professionals said the move signals HSBC’s intention to increase lending volumes so early in the New Year, suggesting securing borrowers ahead of the traditionally busy Spring market, and Monday's timing by HSBC is perfect. Leeds Building Society has also made reductions of up to 0.26% across its mortgage range of mainstream and interest-only mortgages

1.8million homeowners expected to refinance

It is expected that approximately £1.8 million home-owners are expected to refinance mortgages in 2026, many of whom took out fixed-rate deals before the mortgage rates began rising in 2022.

David Phillip commented

David Phillip commented “this is certainly good news for borrowers as many of the big lenders will feel the need to also cut their rates to remain competitive, we could potentially see sub-3.5% deals before the Spring. Lenders may seek to secure applications early as a number of the big lenders approach re-financing. Beyond rates, there are early signs of stabilisation in the property market too.

So if you are looking to re-mortgage your property or considering selling your home and would like a free market appraisal with David Phillip FRICS call 0113 4676400
David Phillip Estate Agents selling homes in Leeds, North Leeds, Bramhope, Adel, Cookridge, Pool-in-Wharfedale and Otley.

86, Leeds Road, Bramhope, Leeds w: davidpillip.co.uk