Mortgage relief as HSBC cuts standard variable rate to two-year low
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HSBC UK has reduced its standard variable rate (SVR) on homeowner mortgages to its lowest rate in two years.
The move will mean lower monthly payments for homeowners who have moved from a fixed rate and chosen not to take another mortgage product with the bank.
The rate has been reduced by 0.25 percentage points, from 6.99 per cent to 6.74 per cent – the bank’s lowest SVR since January 2023.
In general, homeowners can end up on their bank’s SVR when their initial deal comes to an end. SVR rates are set by individual banks.
The move follows the recent quarter-point cut in the Bank of England base rate, to 4.5 per cent.
Oli O’Donoghue, HSBC UK’s director of mortgage lending, said: “Following a review, we are reducing our standard variable rate to 6.74 per cent, which will benefit those customers who have chosen to transition onto an SVR after their fixed-rate term has finished.”
The bank has not disclosed how many customers are on its SVR.
In general, people on SVR typically have a smaller outstanding balance than those on a fixed-rate or tracker mortgage.
HSBC UK said it is also expanding the availability of its mortgages to foreign national residents in the UK, by bringing lending rules for foreign nationals into line with UK residents for those who come direct to the bank, following similar changes to broker-originated mortgages last year.
Among the changes, its standard policy requirements will apply where just one customer on an application has indefinite leave to remain. This is a change from requiring that both customers applying for a mortgage had to have indefinite leave to remain in the UK or EU settled status.
This will enable applications of up to 95 per cent LTV (loan-to-value) where at least one applicant has indefinite leave to remain in the UK – an increase from 75 per cent LTV.
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Get a free fractional share worth up to £100.
Capital at risk.
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Gifted deposits are now also acceptable for consideration as part of the mortgage application, where at least one applicant has indefinite leave to remain.
