Mortgage Advice - Rate

sequin123

Hi

Why when you get older do you dither more, I thought it was supposed to be older but wiser! I have a mortgage with HSBC which is +0.79 lifetime tracker. We want to borrow an extra 83k (LTV is 75%)to move and because we are on such a good rate with existing borrowing it makes sense to stay with HSBC. Here is what they can offer:

Fixed 2yr @ 3.89 Fee = £999
5yr @ 5.89 Fee £399

Tracker Lifetime @ 3.89 Fee = £599

Split Rate 25%(Fixed)/75% (Tracker)@ 2.99 Fee = £999
50/50 @ 3.39 Fee = £999
75/25 @ 3.89 Fee = £999

I have gone for the 2yr fixed just so that we get security on the rate rises but then I am now doubting it as worried we will come out of rate at a bad time, I have been thinking perhaps if I go on Tracker I can jump ship if rates go up as there is no tie-in.

It does seem to me that HSBC products have taken quite a few products off the list since launching this new split rate promotion.

I am due to send back my mortgage application so can change my mind. Is there anyone out there that could give me any advice/opinion?

Thanks

sequin123

Hi, just wondered if anyone could help?

Thrugelmir

Personally I would stay put and maximise the low rate you are currently enjoying. Rates aren't going to stay low indefinately so accumalate capital while you can.

Money markets could rapidly change so predicting future interest rates is total guess work. Fixing should be 5 years otherwise taking fees into account there's little benefit.

sequin123

Thank you, yes guessing interest rates is impossible!

I am going to stay put on the 0.79 for the existing amount but I need to choose a new rate for the additional borrowing. I was thinking as the 2yr fixed is the same as tracker it made more sense? My other thought was to go with the tracker and then in a few months time there might be better fixed rates available.

I thought that the 5.89 was quite high for a 5yr fix? - its seems that since they launched the split load product the range of other products is not very competitive

Thrugelmir

We have become accustomed to very low interest rates in recent years. Spreads of 2% - 3% above base will become the norm again in the future. Hence my comment about capital. As its an opportunity that will never repeat itself. To pay less interest borrow less. There's no longer any such product as cheap borrowing on new money.