HSBC Raises Fixed Mortgage Rates

• News
• Published: 02 Jul 2009 in Money and Mortgages

Banking giant HSBC has blamed higher funding costs for the latest hike in the price of its fixed-rate mortgages.

The lender is increasing rates on its three-year fixed-rate mortgage for people borrowing up to 75% of their home's value by 0.15%, while the cost of its five-year deal is being increased by 0.4%.

HSBC said the unpredictable level of future interest rates, upon which the fixed-rate mortgages are based, has led to the rise in three- and five-year swap rates.

It has become the latest lender to announce the hike after Nationwide, Halifax, Cheltenham & Gloucester, and Barclays' lending arm the Woolwich.

The average cost of a two-year fixed-rate mortgage now stands at 5.09%, while the average five-year deal is now 6.04%.

Meanwhile, with more products offered by lenders for people looking to borrow a high proportion of their property's value, the market seem to be improving for consumers with small deposits or equity stakes.

There has also been a 27% rise in the number of 90% loan-to-value deals from 77 to 98, while the number of 100% and 95%  mortgages has remained unchanged since the beginning of June.