Proactive Investors - HSBC Holdings PLC (LON:HSBA) temporarily withdrew all its loans with only hours’ notice last night following strong demand, as homeowners scrambled to remortgage ahead of expected interest rate increases.
The lender said it would remove all its “new business” residential and buy-to-let products, with deals becoming available again on Monday.
HSBC announced it was withdrawing new deals “to ensure that we can stay within our operational capacity and meet our customer service commitments”, making it likely that the bank will raise rates on Monday.
HSBC originally set a 5pm deadline for securing new deals yesterday, but after experiencing “significant demand”, at 3.45pm it pulled all the remaining deals immediately, reported George Nixon at The Times.
A few scenes (and angry brokers) in mortgage land today as HSBC sends out first an email saying it will pull *all* mortgage deals from sale due to "significant demand" at 5pm, then another at 3.45pm saying it'll now do it immediately. Not back on-sale til Monday.— George Nixon (@George_Nixon97) June 8, 2023
Nationwide Building Society (LON:NBS), the country’s second-largest lender, has already pushed up borrowing costs too – increasing its fixed-rate mortgage deals by up to 0.25 percentage points.
Among Nationwide’s changes, it said two, three, and five-year fixed-rate mortgage deals for people with a 5% deposit will increase by between 0.01 and 0.20 percentage points, with rates starting from 4.69%.
Mortgage rates have been rising since data last month showed that inflation was not coming down as quickly as expected.
There have been predictions that the Bank of England will raise rates higher than previously forecast from their current 4.5%, set last month, to up to 5.5%.
The Guardian quoted Katy Eatenton, mortgage & protection specialist at Lifetime Wealth Management, who said: "HSBC is another lender making changes with little notice, making it nearly impossible for brokers to service clients properly. And then to add insult to injury, they pulled them with immediate effect at 3.50pm."
"I’m praying other lenders don’t follow suit. We need to get an industry minimum notice period sooner rather than later, as the status quo simply doesn’t work for consumers," she added.