HSBC Mortgage, interest rates and the credit crunch... advise needed

mr_scrooge

Hi,

I was wondering if any kind souls could give me some money advice on a few things. Any help is appreciated

Bank Charges
I was recently informed (and I am sure the bank was happy to send me the letter) that my claim for bank charges was rejected - Does this mean that I have to forget the idea of reclaiming these charges or is there any other option?

Mortgage
Just before the credit crunch began, my fixed (4.99% APR) Mortgage ended and I was cursing myself for not choosing a 5 year instead of a 3 year. I was paying about £480 a month and this rose to £580 once i went onto the variable rate.

A few months into this the credit crunch kicked in and my mortgage went down and down and because HSBC have me on a special rate that is g'teed to be 0.5% above the BOE base rate, my rate is currently 1% and I only pay £323 a month

So this all sounds good as I am paying much less than when it was fixed (and am glad I didn't go for the extra 2 years)

So every month I check up on what the BOE are doing with the interest rate, PRAYING that they dont raise it because as long as it is low, my payment is low.

What I do understand is that one day the rate is going to jump up and once it does I would hope it would stay low, be happy if it only went to the old rate of 4.99% but be under the guess that it would rise much higher than that.

I can currently get a fixed rate for about 5.99% from HSBC and for reasons I can't explain, switching to a different provider would just not make sense.

So my big question is :
Is it worth me switching to a fixed rate now?
Should I be on the lookout for some sort of sign that I should go to a fixed rate (ie BOE rate goes up again?)
Is there a guess/estimate on when the rates will start to rise?
Will I find it hard to get a rate of 5.99% once rates are seen to be going up because the banks will be inundated with people doing the same thing I am?

I am really reluctant to go on a fixed rate before I have to because it works out to be at least £200 more a month that I can't really afford. I of course don't want to end up paying a much higher rate either and wondered what advise anyone can give me

Thank you in Advance

Mr Scrooge

Peelerfart

Firstly ,Ebenezer you may get from this forum what some people call advice. Please be assured what you are actually getting is opinion, including this reply.

So, In my opinion.
1. Is it worth me switching to a fixed rate now? - Nah rates will be low for a while yet.

2. Should I be on the lookout for some sort of sign that I should go to a fixed rate (ie BOE rate goes up again?) ? - If anyone knew that they wouldn't tell me, you or anyone else here. Now, and this is pure conjecture,WHEN interest rates start to rise are we going to see hordes of people flocking to fix only to find that the rate went up 0.5% and stayed there for 12 months ?

3. Is there a guess/estimate on when the rates will start to rise? -
After the general election.

4. - Will I find it hard to get a rate of 5.99% once rates are seen to be going up because the banks will be inundated with people doing the same thing I am?

Quite possibly

Thrugelmir

If you afford it. Continue paying your mortgage at £480 rather than the current rate. At least you would be paying off the capital balance quicker.

Worrying about what interest rates might be in the future, isn't worth the effort.

The less your capital balance, the less interest you'll end up paying over the term of the mortgage.