HSBC joins UK banks in cutting mortgage rates

HSBC has joined two other major lenders in reducing mortgage rates following hints of a summer base rate cut by the Bank of England. Average mortgage rates had been creeping up, driven by a lack of fresh competition between lenders during the election campaign. It said the average five-year deal had a rate of 5.53%. "These moves suggest that the recent edging up in rates is now unwinding and most cuts are being made in small steps," said David Hollingworth, from broker L&C. The interest rate on a fixed mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it. Rew Montlake, from mortgage broker Coreco, said: "Lenders will be keen to kickstart a market lethargic from the election, hot weather and football."The country desperately needs the boost of a cut to relieve some of the financial pressures that have held back the economy and put borrowers under immense pressure. Michelle Lawson, from Lawson Financial, said borrowers were "beleaguered" but more lenders could cut rates in the coming days.

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