Looking for advice re: stay or switch mortgage

gcpc1

Hi All,

I wonder if anyone can advise whether to stay or switch mortgage.

• We (wife & I) have an off-set tracker mortgage with First Direct.
• We took £85,000 capital repayment mortgage out on £250,000 property. Started mortgage Apr 09.
• Paying 2.39% + BoE Base Rate (currently 0.5%), so 2.89%.
• Monthly payment of £389 but we pay £600/month to pay off quicker.
• Can overpay as much as we like each month
• We have approx £2,000 in off-set a/c but this will be used in next few months to pay for house improvements and off-set a/c will be topped up by approx. £100/month thereafter
• As of today, £79,221 left on mortgage and that is what we would switch to any new mortgage arrangement
• Mortgage has no exit fees

• I saw HSBC capital repayment tracker rate of 1.69% + BoE Base Rate (0.5%) = 2.19% for life of mortgage. £99 set up fee
• Can overpay as much as we want, no early exit fees - very similar to First Direct mortgage but no off-set facility

Question is - should I look into switching to HSBC or stay where we are?

Thanks in advance for any advice - much appreciated

gcpc1

Hi, Anyone have any advice?

Thanks

SnowWhiterThanWhite

Hi,

I'm very tempted by this deal too!

I am already HSBC mortgage cust, with 4 x mortgages all on fixed rates from 5.17% to 6.29%:eek:

If I switched to the life time tracker special - this would save me approx £111 per month.

I used Martins mortgage calculator which also confirms I would be better off on the new deal, even though I would need to pay an ERC of £1041

I did ring HSBC on their free-phone no. 0800 169 6333 & they did confirm the fact that there are no additional fees to pay other than the £99 booking fee. I wouldn't have to pay a valuation fee either as my LTV is low.

I have tried several mortgage comparison sites, and they all led me back to the above HSBC deal!

In your case, as you're a FD cust, part of the HSBC group, I imagine it would be relatively easy to transfer over, but, i would check if they would expect a valuation or not.

I am even thinking about borrowing extra as my OH's car is on last legs, but, the minimum additional borrowing is 10K, which would be at the same rate, and you can overpay lump sums without penalty, so may, use say, 5k on car and repay 5k straight away?

HTH

gcpc1

Thanks SWTW - much appreciated.

Is there anyone else who can offer any info?

Cheers.

dlk

First Direct also have a normal repayment tracker mortgage @ 1.69 above base rate for 2yrs. As long as you apply before the end of September the cost to switch would be just £99. You could simply switch to that one and save yourself the hassle of transferring mortgages. Before you ask yes all First Directs mortgages are available to existing mortgage customers.

Spangled

Have your incomes changed significantly since you took out the First Direct mortgage? Do your current incomes stack up to enable you to borrow £80k comfortably?

Although FD are part of the HSBC group, this would be classed as a completely new mortgage application - so be prepared for HSBC to go through your bank accounts and financial affairs with a forensic toothcomb! HSBC are renowned for only taking on clients who are 99% safe - do you have any defaults/missed credit card payments? (Your excellent LTV will weigh in your favour though.)

Finally - your current deal is not a *bad* one. There's only a 0.7% difference between the FD and HSBC deals so on a relatively small mortgage as yours (£80k), the difference in the monthly payments will be correspondingly small (check exactly via a mortgage calculator such as: www.bbc.co.uk/homes/property/mortgagecalculator.shtml). Only you can weigh up if that difference in monthly payments is worth losing the offset facility for.

PS Just saw DLK's post above. Switching to another FD mortgage would take away the risk of being declined as it would be classed as a product switch rather than a new application so should be more straightforward. But you'd still lose the offset facility.

PPS The deal DLK refers to is a two-year tracker - after that you go onto FD's SVR, which is a considerably higher rate (currently 3.69%). IMO, their lifetime tracker (BR + 1.89%) would be better, to save the hassle of remortgaging every couple of years.