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HSBC Tracker Rate floor - is it 3% or not???

Heyman_2
Heyman_2 Posts: 1,819 Forumite
in Mortgages & endowments
Want to clear something up! I've seen conflicting posts here regarding the HSBC Tracker Rate floor - that is, the lowest rate that their trackers go down to before they remain static.

For example, Nationwide trackers track the rate down as low as 2.75% and then don't go any further than that. So if you were on a 1% tracker, your rate would never go below 3.75%.

Some people here say the HSBC rate is 3%, some say there is no floor rate!

Which is correct? :confused:
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Comments

  • Rikki
    Rikki Posts: 21,625 Forumite
    Halifax has an option not to pass on rate cuts below 3%, but given that the government has taken a substantial stake in parent firm HBOS, it would be under pressure to pass on rate cuts.



    www.guardian.co.uk
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  • damski_2
    damski_2 Posts: 522 Forumite
    i have been into hsbc today and asked exactly that question

    their base rate tracker has NO collar

    mortgage booked at BOE base rate + .99%:j

    rate may be pulled tomorrow, but as long as you have started the process, you have 3 days to complete the process and then have the rate reserved for 6 months !
  • mr_mortgage
    mr_mortgage Posts: 121 Forumite
    I have a liftime tracker REPO + 0.38% with HSBC and have checked the offer document - there is no mention of any collar on the tracker rate.

    This product was taken in April 2008, so this would appear to be a relatively current stance ... perhaps older or newer products differ?
    Titch :)
  • mitchec1
    mitchec1 Posts: 73 Forumite
    While they have no collar they do have this clause

    HSBC reserves the right to stop cutting trackers if there is a 'material change in the mortgage market'.

    from the papers

    However, a spokesman says: 'There is no appetite to break the agreement with the customer to pass on base rate cuts. Whatever it falls to we still get the margin we originally set out.'



    First Direct have no collar either
  • discoinferno_99
    discoinferno_99 Posts: 114 Forumite
    Thanks for the Guardian link. As a Woolwich mortgage tracker customer, I'm glad to see they have no collar either. Good news. :beer:
    Rikki wrote: »
    Halifax has an option not to pass on rate cuts below 3%, but given that the government has taken a substantial stake in parent firm HBOS, it would be under pressure to pass on rate cuts.

    www.guardian.co.uk
  • Shaztastic
    Shaztastic Posts: 99 Forumite
    Part of the Furniture Combo Breaker
    I'm lucky enough to have a base rate + 0.24% tracker with HSBC.

    Have just spoken to their mortgage department and they have confirmed that my rate will go down to 3.24% with effect from tomorrow so looks like HSBC are passing on the full 1.5% cut to its tracker customers.:j
  • _Andy_
    _Andy_ Posts: 11,150 Forumite
    I did post about this the other week but no-one bothered to read it. Anyway I queried this via Internet banking, here's the reply -

    "Dear Mr X

    Thank you for your email

    The difference between the Tracker rate and the Base rate would be maintained. There are no limits beyond which this will not apply.

    Kind Regards

    XX
    Mortgage Operations"
  • maveli
    maveli Posts: 590 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    A spokesman for HSBC said: 'If we get rates below 2% we may be in the position where we have to invoke a collar, but we're not there yet. Everyone with a tracker product must be feeling pretty pleased with themselves anyway

    http://www.thisismoney.co.uk/mortgages/article.html?in_article_id=456704&in_page_id=8&ct=5
  • freckles25nw
    freckles25nw Posts: 2 Newbie
    Everyone else has mentioned it, but I thought I would add to it too. Wrote to HSBC and they replied today saying:

    "Thank you for your recent enquiry regarding your Tracker rate mortgage. I can confirm that your Tracker mortgage will adjust in line with the Bank of England base rate cuts within 24 hours. I can also confirm there is no "floor" to our Tracker mortgage."

    I'm on the Tracker BOE + 0.89% (it was 0.99% but got the discount with a Plus account).

    What a relief!!
  • Jonbvn
    Jonbvn Posts: 5,562 Forumite
    Part of the Furniture 1,000 Posts
    Heyman wrote: »
    Want to clear something up! I've seen conflicting posts here regarding the HSBC Tracker Rate floor - that is, the lowest rate that their trackers go down to before they remain static.

    I hope this answers your questions.
    http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5286992.ece
    In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:
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