hsbc overpayments/reduce term info needed

ripon12

hello i have just took out a new mortgage with the hsbc on a 5 year fixed at 3.99% i owe 92000 on a 195000 home but i want to over pay the problem is that the hsbc will only let me overpay by 20% of the monthly payment wich is around £135 but i want to pay around £325 extra a month so looking for advice on how to best put the extra money or better still if i speak to hsbc will they let me reduce the term of the mortgage or will i loose the rate i got like i will if i go over the 20% overpayment
has anyone ever reduced the term with hsbc

TEDDYRUKSPIN

Just a word of warning in case you reduce the term with hsbc.

HSBC can reduce the term of your mortgage easily. They will just reissue a new mortgage contract for you to sign and keeping the same mortgage rate. Please check this though as they might have changed this.

Warning now. If you fall in trouble and want to extend the mortgage, you will go through another mortgage process. YES! Another mortgage application just to re-extend the term of the mortgage.

20% per month is normal for many companies. The only difference is that other lenders allow over a maximum of 20% over a year. etc etc.

Use the mortgage calculator online with hsbc and you will get a fair idea of what you will pay.

dimbo61

3.99% is a great fix over 5 years and if you can afford 20% overpayment on top is even better.
Now what you can do is build up savings in cash ISA,s and regular savers
Isa,s are paying 3/3.25% this year but maybe paying over 4% next year so OP as much as possible and build up savings ( which also provide an emergency fund if needed!!!)

Tangoed66

I'd check with HSBC again as we are in the process of setting up an HSBC mortgage which we would also like to overpay, the way it was explained to us was that the direct debit could be set up to pay a maximum overpayment of up to 20% but that we could overpay more by other means, if we choose to ie; set up a standing order if it will be a regular payment or by debit card for one off payments. We have decided to have the direct debit set up for the minimum payment and to organise a standing order to pay the over payment which means it is more flexible if we want to amend it at any time.

Tangoed66

Sorry ripon12, I checked on the HSBC website after my previous post and it appears that the unlimited over payments are on their tracker mortgages only

ripon12

Thanks for reply I was getting exited there but when I checked online it's only for trackers not fixed:mad:Never mind think I'll go down the ISA like previous reply suggested cheers folks

smartiedriver_2

Hi, yes, previous comments are correct, you can only make unlimited overpayments by up to 20% of your monthly repayment amount. Any higher is considered a breach of your fixed rate T&Cs and you will be charged an early repayment fee. Definitely save the money, and make sure you don't dip into it for 'rainy days'!

smartiedriver_2

And Tangoed 66 - if you are on a variable or tracker rate your direct debit can be any amount of overpayment as long as it is the same amount each month. If you wish to make lump sum reductions you can make a 'bill payment' via online banking or phone their Mortgage Service Centre in Sheffield to take the extra from your HSBC current account.

The 20% rule only applies to their fixed rates and any old capped rates that are still in existence.