Recent years have seen mortgage rates dropping time and time again. There’s no doubt the market has been highly competitive in recent times, responding to the base rate falling to historic lows. Many homebuyers have taken advantage of choosing a fixed-rate mortgage product with a super-low interest rate, either to get them on the housing ladder or simply to get a more affordable deal.
There has been another theme evident in recent months too, though – the warning that it all had to come to an end eventually. However, when warnings about the possibility of rising interest rates have turned out to foretell the exact opposite, it has been difficult to ascertain when it might all come to an end.
HSBC’s cheapest deal is withdrawn
The latest news seems to indicate the all-time low mortgage rates could be ending very soon, however. HSBC was famous for offering the 0.99% two-year fixed-rate mortgage, but now they have withdrawn this with immediate effect. No doubt those who took advantage of it recently will be breathing a sigh of relief at locking it in while they had the chance. It was available since June this year.
But this is not the only change HSBC has made. They have also gone through many of their other mortgage products and upped the interest rates on those. Rates vary but many have increased by up to 0.5%.
Does this indicate many other rate rises to come?
It seems almost inevitable we will see such changes. While the disappearance of the 0.99% deal has hit the headlines, not everyone will have been in prime position to take advantage of it anyway. It required a 35% deposit, which all but ruled out first-time buyers.
It is too early to say whether other lenders will follow suit, but it seems likely they will. At present, though, Yorkshire Building Society is offering a deal at 0.98% which shows no signs of disappearing – not yet, anyway.
The importance of shopping around
As always, with the mortgage markets displaying a degree of uncertainty, it is vital to ensure you shop around to identify the best and most cost-effective products if you are looking for a mortgage. Despite the withdrawal of this product, there are still some great value-for-money deals to be had – you must simply shop around to find them.
But December 2016 may be remembered as the turning point in the mortgage marketplace. Perhaps as 2017 gets underway, we may see more low rates being scrapped and gradual increases coming to the fore. Only time will tell, but many experts believe the Brexit vote and the election of Donald Trump as US President may well lead to higher rates all round.
In short, then, it is likely we have reached the bottom of the pile. From here, the only way mortgage rates are likely to go is up, even if they do so quite gradually with other lenders gradually following HSBC’s suit.