Friend+Gf applying for m.gage- what %?

bob_dob

Blimey that rate is amazing.
Just as an example of what my friend COULD have ended up paying if i hadn't been given wonderful help on here:
If they had gone with their IFA with the rate of 5.3% over 30 years, lending £105,000, the total they would have paid back would have been £208,000.

However, the same amount with HSBC at 3.84% over 25 years (lower monthly payment too) the total would be just £163,498!!

Shocking!

Thank you all.

somethingcorporate

Looking at these things over the life of the mortgage is pointless, what you need to compare is the rates in the fixed period and any follow on rate. The follow on rates (SVR) are trackers and in those calculations you use above would likely not model any changes in the base rate.

betmunch

bob_dob wrote: »

However, the same amount with HSBC at 3.84% over 25 years (lower monthly payment too) the total would be just £163,498!!

Are they going for this one?

If they are could you keep us updated on the progress as HSBC have a habit of changing their mind during an application, it would be good to see a first (or second technically) hand experience of what they do

Good Luck with it

bob_dob

Hi there,
No they are not going for that one as it is a tracker and they want fixed and they say they have been into HSBC and have been offered a fixed rate at a 'decent' price and are probably going to go with that (without going to a broker or checking the other non-broker ones mentioned- Co - OP, Direct Line, First Direct and HSBC). Oh well :0(

betmunch

But they are going with HSBC?

Could you keep us updated on how they get along?

Cheers

bob_dob

Hi again,
Just so you know, my good friend quoted 4.2% with HSBC for a 5 year fix and they now have a 20% deposit so only need to lend £95,000.
They have now got a meeting with HSBC today after a prelim meeting with them on last friday.
Could they still be refused? Will there be any fees they need to prepare for (although i believe this particular deal is 'fee free')?

Conrad

bob_dob wrote: »

Hi again,
Just so you know, my good friend quoted 4.2% with HSBC for a 5 year fix and they now have a 20% deposit so only need to lend £95,000.
They have now got a meeting with HSBC today after a prelim meeting with them on last friday.
Could they still be refused? Will there be any fees they need to prepare for (although i believe this particular deal is 'fee free')?

Yes they can be declined at any time, otherwise what would be the point of Banks employing underwriters.

Tell them not to buy insurance there. They will find cheaper and better options. Keep in mind the Bank earns significantly from selling insurance.

bob_dob

Hi,
Thanks for that,
Well it seems that the person my friend dealt with said that the fact that the house in question has something attached to it where you have to have lived in the area for 5 years beforehand might affect the outcome as the underwriters dont like this sort of thing sometimes? He will find out in a few days.

bob_dob

Hello anyone?

bob_dob

Hi again,
So please can someone explain to me why not many people go for 5 year fixes and usually prefer to stick to 2 year fixes?

And is the scheme i mentioned about needing to have lived in the area for 5 years a problem at all?