Best deal for low-ish LTV?

JohnC_4

I'm coming to the end of a fixed rate mortgage period and looking to remortgage for a better deal. LTV is around 50%.
I'm currently looking at First Direct (base rate + 2.49% for term) and HSBC (1% discount on SVR (currently 3.99%) for 2 years).

These 2 deals are fee free and start with the same interest rate. But how do people think things will pan out when rates rise? Obviously, the rate on the First Direct product would increase immediately. However, as we all know, SVRs are currently way above base rate, so are lenders (specifically HSBC I guess) likely to leave SVRs unchanged if rates rise by say 1%?

All things being equal, the First Direct deal appeals to me as I would like the flexibility of an offset mortgage.

Does anyone have an opinion or alternative suggestions?

Thanks!

pwllbwdr

HSBC didn't drop their SVR for the last two base rate cuts. My suspicion is that the SVR will follow the initial base rate rises upwards, but will at some stage skip a couple of rises. That's why I chose a SVR discount rather than a tracker.

BULLNOTBEAR

If you go on the SVR you are leaving yourself in the hands of the bank who can increase the SVR as and when, irrespective of bank of england interest rate movements.

In the past lenders have increased SVRs by more than the rise in bank of england rate rises. I don't think HSBC will be kind to borrowers and not raise them when the Bank rates start increasing.

You know with the tracker that your rate will increase with the BOE base rate.

Look out for some increases within the year.

rsykes2000

If I had 50% LTV (and I wanted to stay with HSBC) I would go for their term tracker based on the base rate, not their SVR. 999 fee, base rate + 2.24%(so currently 2.74%) and you know it won't be spuriously raised when they feel the need to pull in a bit more cash.

rattla

Just to let you know that the HSBC 2.99% (0.99 discount) rate with no fees is ending next week, so if you want to get it you need to get in there REALLY quick.