HSBC switch to Interest Only

R34GTT

I currently have an HSBC Tracker, current rate is 1.04%.

I am wondering if anyone has changed their HSBC mortgage from a Capital Repayment to Interest Only and been able to keep the same rate?

At the current rate it seems if I was allowed to switch to Interest Only I could save the difference in a higher interest savings account until such a point the Mortgage rate rises above the savings rate. At that point I'd transfer my savings balance to pay off a chunk of the mortgage balance.

I have called HSBC but their mortgage people say I'd need to go in branch which I'd have to wait ages to see an advisor. So in the meantime I am wondering has anyone else done this?

_Andy_

The rate isn't an issue. What is an issue is your LTV. How much roughly do you owe an realistically how much is the property value?

R34GTT

_Andy_ wrote: »

The rate isn't an issue. What is an issue is your LTV. How much roughly do you owe an realistically how much is the property value?

I owe £93000 and if Zoopla is to be believed £128,000 so 73% LTV.

My interest only monthly payment would be around £80 based on my current balance.

_Andy_

It's possible but unlikely as they wouldn't normally consider a savings account a suitable repayment vehicle. Worth a go though assuming your maths regarding the financial side of it stack up I guess

R34GTT

_Andy_ wrote: »

It's possible but unlikely as they wouldn't normally consider a savings account a suitable repayment vehicle. Worth a go though assuming your maths regarding the financial side of it stack up I guess

I guess HSBC would advise me of other suitable repayment vehicles if they approved my request. If I assumed a rate of 3.2% tax free on savings I could repay my mortgage 5 years early. Of course the BoE rate will no doubt rise in the next 2-3 years but in the mean time I'm still saving a few hundred £. I wish I'd considered this when the rates fell to 0.5% nearly 3 years ago.

R34GTT

Got an appointment in branch this Friday. Not holding out too much hope but it's worth a try.

Bluemeanie_2

Sorry to digress your thread, but how on earth did you get such a super low rate! Spill please!

Rikki

Bluemeanie wrote: »

Sorry to digress your thread, but how on earth did you get such a super low rate! Spill please!

Years ago the tracker rates offered were as low as 0.5% but the BoEBR was a lot higher and fixed rates worked out lower than the trackers. The BoEBR is now low and people with these trackers are benefiting.

Bluemeanie_2

Rikki wrote: »

Years ago the tracker rates offered were as low as 0.5% but the BoEBR was a lot higher and fixed rates worked out lower than the trackers. The BoEBR is now low and people with these trackers are benefiting.

Fair play. Thank you for answering me! Was just curious! (not to mention highly jealous lol.) But I suppose mortgages can go either way at any time and this time, this person benefited rather than the bank :T(fair enough).

Thrugelmir

Rikki wrote: »

Years ago the tracker rates offered were as low as 0.5% but the BoEBR was a lot higher and fixed rates worked out lower than the trackers. The BoEBR is now low and people with these trackers are benefiting.

Some people had rates below BOE base. Personally I have .35% life time tracker. Pure luck and down to moving house at the time rates like this were available.

Yorkie1

They will probably expect you to tell them what your alternative repayment plan is, rather than advise you.

You should also get it confirmed in writing that you will be able to revert to the same interest rate when you go back onto repayment - otherwise you're getting a short term gain for a long term hit.