HSBC switch to Interest Only

R34GTT

Bluemeanie wrote: »

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

As others have said really. I took out my lifetime tracker mortgage mid 2007 when the BoE base rate was around 5%. The mortage tracks 0.54% above the base rate which is currently 0.5%. It was luck mostly as at the time I was tempted by a 5% fixed for 10 years! The reason I chose the tracker was because HSBC had a special offer at the time and it meant no arrangement or exit fees and unlimited ability to overpay.

In some ways I have benefited but I've also taken a large hit on the value of my property having bought as a first time buyer at the peak of the property market.

R34GTT

Yorkie1 wrote: »

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.

Thanks, well I will suggest using risk free savings e.g. 8% First Direct Regular Saver, proceeds of which get chucked into an ISA every April. Maybe I'll print off my spreadsheet to illustrate my plan. The rate is key to my idea so I will be sure to double check I will never lose it and also that I have the ability to overpay whenever I like. This would mean when the mortgage rate rises above the savings rate I can just change my standing order from savings to the mortgage account.

R34GTT

I had the meeting today and I wasn't told an outright no but the final decision would be with the underwriters and it was more of a they'll probably say no. If they agreed I'd keep the same rate, term and no overpayment restrictions or exit fees.

However I'd need to apply as though it was a new mortgage application which means 3 months pay slips, credit search, ID (even though I've been with HSBC/Midland Bank for 17 years) also evidence of funding at least £310 into an ISA (need to amend SO to this amount) as this may help sway the underwriter regarding a repayment vehicle being in place. So i'm going to hold off for 3 months while I build a history of these payments to savings and then apply with my fingers crossed.

The advisor did admit the bank make it as hard as possible to change to interest only these days. Wonderful

Thrugelmir

R34GTT wrote: »

The advisor did admit the bank make it as hard as possible to change to interest only these days. Wonderful

There's no right to switch. The lender sets the terms. So isn't a question of being hard.