London, Jan 6, 2026, 08:11 GMT — Regular session
- HSBC shares were flat in early London trade after the bank cut UK mortgage rates across a wide range of deals.
- Investors are weighing whether sharper mortgage competition will squeeze lending margins as rates ease.
- Next focus shifts to the bank’s annual results on Feb. 25.
HSBC Holdings Plc shares were unchanged in early London trading on Tuesday after the lender cut mortgage rates across a wide set of UK products, stepping up competition at the start of the year. HSBC was last flat at 1,207.2 pence. 1
The move matters because mortgage pricing is a front-line battleground for UK banks, shaping loan growth and the profit they make on lending. A sharper push for volume can come at a cost if banks start undercutting each other.
That tension is back in focus as rate expectations shift and households refinance. Investors are looking for early signs of whether lenders will protect profitability or chase market share.
HSBC cut rates across residential and buy-to-let products, with reductions spanning deals for existing customers, first-time buyers, home movers and remortgagers, as well as some international fixed-rate mortgages, Mortgage Introducer reported. “HSBC has kicked off 2026 with the first notable mortgage rate cuts of the year, trimming pricing across a wide range of fixed deals,” said Nicholas Mendes, mortgage technical manager at broker John Charcol. 2
Fresh Bank of England data underscored why lenders are jostling for business. British consumer borrowing rose by a net 2.08 billion pounds in November, while mortgage approvals for house purchase edged down to 64,530 from 65,010 in October, the central bank said. 3
HSBC’s pricing move also puts rivals on notice, with Britain’s biggest lenders watching each other closely on fixed-rate deals. Fixed mortgages are typically set off market rates that reflect expectations for where central bank policy will settle over time.
Separately, a stock exchange filing showed HSBC issued 212,043 shares over the last six months of 2025 under two employee share plans. The disclosure came in a routine “block listing” return, which tracks shares reserved and issued for staff schemes. 4
For shareholders, the key question is whether lower headline mortgage rates translate into healthier lending volumes without eroding earnings power. Net interest margin — the difference between what a bank earns on loans and pays on deposits — often softens when pricing competition intensifies.
But a broad mortgage price war would risk dragging margins down faster than loan growth can compensate, especially if funding costs rise or credit quality deteriorates in a softer housing market. Any stumble would likely hit sentiment across UK bank stocks.
