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Mortgage Advice: Discount or Tracker

I am just taking on a less than 60% LTV mortgage to buy a house having rented for some time.

I am chosing between two options at HSBC that i have whittled it down to:

1. Discount: HSBC SVR (currently 3.94%) less 1.45% = 2.49% for 2 yrs
2. Tracker: Bank Base Rate (currently 0.5%) plus 2.24% = 2.75%

Obviously the first option is lower, but I had a few thoughts:
1. Is there a risk that HSBC could increase their SVR by more than the base rate changes?
2. Is there a chance that they could increase it by less (for example, if their SVR is higher than others (eg Lloyds and Abbey) and they were bringing it down)?

If anyone has any view on the likelihood of these or how HSBC has behaved in the past, that would be great.

Many thanks
OPEN

Comments

  • opinions4u
    opinions4u Posts: 19,411 Forumite
    They can do whatever they choose whenever they choose with their SVR.

    Prior to the credit crunch their SVR was one of the lowest.

    It's now at the higher end of the mainstream lenders.
  • herbiesjp
    herbiesjp Posts: 8,499 Forumite
    The margins banks are making on mortgages are the highest they have been at the moment

    Give them an excuse to put rates up, and they will try to increase thse margins as much as possible IMO.

    So a raise in rates will mean SVR increases, equal to, if not greater than than the actual BoE change (again IMO)
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Thanks - if anyone has any other views on what HSBC aare likely to do with their SVR, that would be greatly appreciated.
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