Fixed mortgage with HSBC - want to reduce term of my mortgage

Ladybird150

Just wondered if anyone can help me with my query. I fixed my mortgage with HSBC last year until July 2011. I am allowed to make monthly overpayments of 20% without incurring penalty charges.

Have recently had pay rise and want to make overpayments of more than 20% (especially as savings rates are so low at the moment) but can’t do this until my fixed term is over. I remember reading a thread recently where someone managed to reduce the term of their fixed mortgage and their bank allowed them to do so thereby making higher payments on their mortgage without incurring early repayment charges.

I phoned HSBC last week and was told that I can reduce the term of my mortgage but need to go to a branch to do this. I went to my local branch yesterday I was told that they can easily reduce the term of my mortgage without any penalty charges. I was so happy to hear this so I told them to go ahead straight away. When the advisor went to do this on the system she realised that they no longer have the same fixed deal as my mortgage (which is 5.53%) so she went to speak to her Manager. The Manager then told her that I can’t reduce term of my mortgage until July 2011. I was so disappointed especially as I’ve been told that I can do this beforehand by two different people within HSBC.

Has anyone got a fixed mortgage with HSBC and managed to reduce term of their mortgage without incurring early repayment charges? I am asking this as I'm getting conflicting advice from HSBC. Any help & advice would be greatly appreciated.

beecher

Can't help you as I've never banked with HSBC but that doesn't sound right - can you go to a different branch? Alternatively phone back the HSBC and get them to phone the branch on your behalf?

Ladybird150

I've phoned HSBC again this morning and told them what happend. I was then told that if the branch can't do it then the answer is no (they can't reduce the term of my mortgage). I will try another branch. Thanks.

beecher

That sounds odd 0 hopefully someone will come along with real experience of this. If it doesn't work out, then open a Web Saver account somewhere, put it all in and pay off one large overpayment in July 11

figgles

If you're unsuccessful, put the money into a reasonable account (or buy premium bonds!), then come july 2011 move to another lender, sounds like an offset mortgage might be best for you if you can overpay regularly.

I've had a Virgin One account for 10 years, love it, although some hate it. If you are like me and are able to pay extra every month, it's good to see every month the interest shrinking because you're paying off capital.

Booradley_2

If you overpay 20% then the mortgage term will automatically reduce by slightly more than 20%.
If you officially reduce the term then you won't be overpaying, just paying the recalculated amount.

TEDDYRUKSPIN

What idiots! You can reduce the term of the mortgage for HSBC even if you are fixed! Unfortunately you must have approached a stupid trainee or a newbie. What you can't do is extend the mortgage (fixed) without carrying out a new application.

Phone up to the idiots and tell them to do the following:

(1) " I want to reduce the term of the mortgage to ? (i.e. so many years) eg. 15 years "
(2) " Please go to your MEMO part of your damn system and send a message to mortgage service centre to reduce the term to so many years and to keep the fixed rate "

You do not need to make an appointment. Write a letter giving permission to do so! If joint you will need both signatures. Pop in (preferentially not lunch time) as they moan sooooooo much as how busy they are. Ask to see a mortgage advisor or financial planning manager and explain. Pass them the letter and tell them to carry this out as per instructions.

Wait 7 days for your new offer document to arrive in post! Sign and return. If you do not have this, your term will not reduce.

Voila! What muppets! Nothing changes.

PS. If you do not receive anything by post, they will not have done anything! As for branch managers? They have no clue...... they only run the retail side of things.


QUOTE OF THE DAY: " I can't float on water but I can definitely sniff a muppet advisor from miles away "

Ladybird150

Thank you all for your responses. I'll follow your advice TeddyRukspin and hopefully I'll get this sorted out asap.