HSBC - what will happen?

TrulyMadly

Evening everyone,

It's my first post so go easy on me!

Our 2 year interest payment only mortgage ends in June 09. We are paying approx £480 and it is fixed at 5.79%. It is for £100,000. At the end of the fixed period we are told it will revert to the SVR at that time.

I rang HSBC today to find out what will happen in June. They could not even tell me what the current SVR is and said they will write to me a little nearer the time. Can anyone tell me whether in June it will change to a repayment mortgage or will we just continue paying the interest only.

Thank you

Comyface

I think it depends what type of mortgage you took with them. Their 'Homestarter' mortgage (if that's what it's called) does automatically change to a repayment mortgage after 2 or 3 years (sorry can't be more specific, just dredging my memory for what I can remember). If you took out a standard interest-only mortgage then it was stay as that unless you change it yourselves.

I think it's poor that HSBC can't answer your questions, though. Have you got your original documents? I'd have a look through them and see if they shed any light. Or give them another ring and see if you can speak to someone who does know the answer.

TrulyMadly

Thank you for replying.I was beginning to think everyone was ignoring me!

Is there a button or something that I can click on to say thank you?

_Andy_

You will still be interest only for a year. You should find your payment will drop - I believe you will have the old style SVR which means your rate never more than 1% above BOE base rate (you will need to check your documents though). Alternatively HSBC may offer you a deal nearer the time.

TrulyMadly

Thank you Andy. Do you think we would be able to overpay within that year or would there be penalties?

michaels

_Andy_ wrote: »

You will still be interest only for a year. You should find your payment will drop - I believe you will have the old style SVR which means your rate never more than 1% above BOE base rate (you will need to check your documents though). Alternatively HSBC may offer you a deal nearer the time.

Think that rate was only available up to about 5 years ago I'm afraid so you will likely go to svr - currently 3.94% and 'under review' following the March cut.

_Andy_

TrulyMadly wrote: »

Thank you Andy. Do you think we would be able to overpay within that year or would there be penalties?

You can overpay on the SVR as much as you want without limits. If you're on a fixed rate you can overpay up to 20% of your monthly payment without being charged.
You can do this over the phone or by internet banking.