Discounted Variable Rate Mortgage

A_Star

We're currently on the Halifax variable rate, our deal ended and at the time the fees to remortgage out weighed any benefit gained.

I've just found the HSBC discounted variable rate mortgage. It will save us nearly £100 a month (excluding the first month as there's a £99 fee).

My question is does the bank variable rate generally go up in line with BoE base rate or could they decide to shoot it up? Also does the variable rate generally stay around the same between the banks?

Assuming it does generally track the base rate then the base rate would need to go up by around 3% before we start loosing compared to a fixed rate we could get now but by that time we'll already have saved quite a lot.

Thanks for your help.

powerwin

This is not professional advice ...

Generally the movements in bank variable rate will reflect the movements in the base rate, so they shouldn't "shoot up" unless the base rate does.

All banks get to set their own standard variable rate, so you will find some differences between banks, and differences can be quite significant.

Rgds

hcb42

have a look at first direct, they often pay the £99 fee if you have another product with them (which you have to open a current account with them).

I dont know if it is on at moment, haven't checked, but it was when we were remortgaging

smartiedriver_2

The discounted tracker rate is pegged a certain number of basis points off the base rate, so yes, it will change as base rate changes (normally within one month).

The standard variable rate is different altogether - this is what previous fixed rate clients revert to once their fixed rate ends. This is not pegged to any specific base rate or underlying rate and the bank can change it as it pleases.