My Current HSBC Mortgage and Interest Rate Rises

JamesJupiter

Hi

I was hoping someone may be able to offer me some advice on the above.

I've heard a lot of talk recently about expected interest rate rises over the next month or so and I'm currently sat tryng to weigh up my options and trying to work out what to expect should the interest rates rise in the coming months.

My own mortgage information is below..

Balance = £ 55,719.00
Term Remaining = 25 years & 7 months
Current Rate = 3.94% Variable until 28 Dec 2036
Current Monthly Payment = £ 287.20

I was sat on hold for HSBC this morning for quite some time waiting for an advisor and gave it up as a bad job so will probably have to try agan Monday.

I was wondering if anyone could give their views on the potential rate increases and how this may impact on my monthly payments etc moving forward.

I'm also wondering whether or not I should fix to be on the safe side, depending what the potential change may be in the monthly payments.

Any advice is greatly appreciated.

Thanks in advance!

Joe_Bloggs

@JamesJupiter
Consider using the MSE Ultimate Mortgage Calculator to try out potential scenarios.
J_B.

JamesJupiter

Thanks Joe

I'm either being completely useless or have missed the point of the calculator.

Whilst the mortgage calculator seems an excellent tool, I can't seem to fid any options that relate my own personal situation.

Any help?

Mikazaru

If you use the basic mortgage option on the calculator you can input whatever interest rate you like, for instance if your rate went up by 2% your monthly payment would rise to about £350.

JamesJupiter

Mikazaru wrote: »

If you use the basic mortgage option on the calculator you can input whatever interest rate you like, for instance if your rate went up by 2% your monthly payment would rise to about £350.

Right, I get it.

There's so much stuff out there at the moment it's hard to tell what the best ourse of action is.

Would ou agree that a 2% rise straight away is unlikely or would you you say it's quite possible?

I know you can't provide professional advice but I value your input

ado

Interest rates can only go one way so the main debate is about how fast they will go up. I think the rate rise will be slow because although the Bank of England is concerned about inflation they also need to consider the general strength of the economy which is currently weak and likely to remain so for the near future.

I have gambled and took a tracker because to me this would work out cheaper than a fixed rate over two years even taking into account potential rate rises. I have also chosen to over pay a modest amount in order to make the most of the current low rates.

BoGoF

With a relatively low mortgage you are less exposed to interest rate rises but having said that you should be trying to overpay as much as possible so that you are even less exposed to future rate rises. Is there any scope for you to overpay?

Your mortage term seems awfully long for such a small amount as well.

JamesJupiter

BoGoF wrote: »

With a relatively low mortgage you are less exposed to interest rate rises but having said that you should be trying to overpay as much as possible so that you are even less exposed to future rate rises. Is there any scope for you to overpay?

Your mortage term seems awfully long for such a small amount as well.

I originally took the mortgage over 30 years and have chipped away at it a little in the last few years but my scope to overpay is very limited at present, even though I'd have liked to throw a bit more money at it.

If the BOE raises their rates by say 0.5 of a percent, how would HSBC react with their current rates?

I can't seem to find any information that connects the two.

Thanks again!

Joe_Bloggs

@JamesJupiter
There is no way of telling what HSBC will do with their standard variable rate in the event of a Bank of England base rate change. As far as I know they are not tied to any market rate. The rate they do charge is determined by the rates at which they can get hold of funds and still make a modest return.

If these rates look likely to go up or in fact go up then the SVR may rise at least by this amount or even more.

You can stress test your budget by seeing if you can live at a higher mortgage payment either from a higher SVR or even a new fixed re-mortgage rate. Try and see where the difference between the new mortgage payment and your present one will come from over several months.


Examine your budget and see where you can get better value so you are prepared for SVR increases or extra re-mortgage costs.

J_B.