Which deal is best??

Harvard82

Hey there, looking for some advise, I'm a first time buyer & a newbie here (so please be gentle!)

Looking to buy a property in Scotland for a bout a £150k but only have a 10% deposit. Now I've been to a couple of brokers but they just aren't coming up with any decent deals on their system so I've decide to go solo & go straight to the lenders.
I've searching around on the web & found 2 good deals but I dont know which is the better deal as I cant get my head round the overall cost for comparison rate?!

These are the deals I have found, both are 2 year fixed rate:

Yorkshire Building Society Interest rate of 4.95%, overall cost for comparison is 5.2%, Product fee is £995

HSBC Interest rate of 5.09%, overall cost for comparison is 4.3%, Product fee is £99

Can anyone advise which is best for me?

Many thanks in advance.

Thrugelmir

Paying £995 for a 2 year fix isn't advisable. As you'll incur another charge for a new product after 24 months.

If a 2 year fix is what you require then try HSBC.

Though a 5 year fix may give you more piece of mind.

getmore4less

Followon rate is missing can't compare without that

Harvard82

Hi getmore4less

Follow on rate for the Yorkshire is 4.99% & HSBC is 3.94%.

Thrugelmir - The rates for 5 year fixed are sky high & there is no way I can affford the monthly payments.

I have found another deal from The Yorkshire which comes with fees assisted - this includes legal fees, free standard valuation and no mortgage advance transfer fee. The rate for this is 5.59%, SRV 4.99%, overall cost for comparison is 5.2%. Do you or anyone else think this is a good deal??

Harvard82

Can anyone help no??

getmore4less

Harvard82 wrote: »

Hi getmore4less

Follow on rate for the Yorkshire is 4.99% & HSBC is 3.94%.

That makes the HSBC deal the best assuming the follow on rates will track in a similar way(are both SVR or trackers?.
borrowing £135k (£150-£15k) using a payment of £900pm over 20 year

what will be left after 2 years.

YBS £135995 @ 4.95% £127,460.60
HSBC £135099 @ 5.09% £126,857.14

the significanly lower follow on rate is also a benifit longer term.


Thrugelmir - The rates for 5 year fixed are sky high & there is no way I can affford the monthly payments.

I have found another deal from The Yorkshire which comes with fees assisted - this includes legal fees, free standard valuation and no mortgage advance transfer fee. The rate for this is 5.59%, SRV 4.99%, overall cost for comparison is 5.2%. Do you or anyone else think this is a good deal??

Is something going to change so you can afford higher payment is you chose the 2 year fix? If rates go upo you are only protected for 2 years

What is you MAX payment now?

Harvard82

Maximum payment just now my partner & I have worked out is about £800 per month.

Cant see any major change in salary for us both once the 2 year fix is up. I think both YBS & HSBC deals are both SVR.

getmore4less

Harvard82 wrote: »

Maximum payment just now my partner & I have worked out is about £800 per month.

Cant see any major change in salary for us both once the 2 year fix is up. I think both YBS & HSBC deals are both SVR.

So you are stretching £135k @ 5% over 30y is £725pm does not leave a lot of room for rises, 6% is £810

if rates go up HSBC should give around 2% base rise before the problems start ybs 1%.


What about waiting a bit longer and saving up a bigger deposit?

Harvard82

We've been waiting around long enough, parents are cramping our style & I'm 28 so it's getting embarrassing.

How do you know the different base rises are? Do you think it would be best to get a 5year fix for security?

getmore4less

Harvard82 wrote: »

We've been waiting around long enough, parents are cramping our style & I'm 28 so it's getting embarrassing.

How do you know the different base rises are? Do you think it would be best to get a 5year fix for security?

No one know the future rates, but once your 2 years fix are up the HSBC deal follow on started at a 1% below the YBS so has a chance of being lower in the future.

check the history of how each company has varied their SVR as a guide to what they might do in the future(still a guess)