HSBC mortgage

Lunary

Hi, we are first time buyers who have just had our offer accepted on a property. We are looking for a £50,000 mortgage on a £160,000 porperty and have stumbled across HSBC's lifetime tracker 60 at 2.74%. Over 15 years the monthly repayments are doable and we have a fair amount of wriggle room for when the base rate increases. There is no penalty for early repayment or over-repayment, no tie in period or exit fee. It seems like a good deal, I am awaiting a call back from HSBC to discuss further but was wondering if I am missing anything?

The only problem I can forsee is that while moneysupermarket has pegged it as compatible with our situation, when I run through the scenario on the HSBC site, based on my partner's income of £31,000 and mine of £0 (currently a SAHM), the site says that the maximum we can borrow is £23,000. When I change my income details to earning £4000 a year, it then allows us to borrow the £50,000. Don't suppose anyone can shed any light on why this is?

Thanks for any advice.

_Andy_

Give HSBC a ring and they will confirm if you meet criteria/

Lunary

Thanks, managed to get through to them earlier and it seems as though we won't qualify to borrow the full £50,000 as I am classed as a dependant because I am not earning. It's a shame as it would have been a great mortgage for us. Back to teh drawing board, I guess.

g_attrill

I'm surprised that it cut back the borrowing amount so much, do you have significant fixed outgoings? On a basic 4x multiple you should be able to borrow around £120k.

Anyway, the product doesn't have any catch as such, except that it's a BoE tracker so (for example) if rates went to 5% it would be at 7.24%. They have a SVR discount at 1.99% at the moment, but it's less flexible, and at the end goes onto the SVR of course.

Lunary

Thanks g_attrill. No, we have no significant fixed outgoings, only around £500 a month for bills etc which would be roughly the same in the new house. We have no debts, loans or anything like that. That's why I was surprised we wouldn't qualify, I was under the impression we would be a really good low risk candidate for any mortgage. The only thing I can think of, based on what they said, was that the lending is much more low risk based on two incomes rather than just one. Unfortunately the single income but joint mortgage application puts us out of the running on all the HSBC mortgages. I have heard that HSBC tend to cherry pick their borrowers as they have the best rates at the moment so I guess their criteria is much more selective.

I am now looking at the Woolwich 1 year step lifetime tracker which is 1.48% above the Barclays Bank base rate for the first year and 2.49% for the rest of the term. I will give them a ring to discuss tomorrow but it looks a pretty good deal.

Edit - Have just given First Direct a ring regarding their offset base rate tracker currently at 2.79% and, in contrast to the HSBC criteria, we do actually qualify! I'm really pleased as this is very similar to the HSBC rate and is nearly as flexible. There is a closure fee of £149 if the mortgage is transferred to another lender before term although this amount seems pretty small to me - I have heard of much larger fees. Am I right in thinking that the offset part of the mortgage is a good idea though? We have kept back around 15k as the house needs a bit of work (nothing major and my partner is a builder which should keep costs down too) which would reduce our monthly payments by about £30 based on the current rate if we were to put the money in First Direct savings. I am struggling to find any negatives here but am wondering if I'm missing anything?

Thanks