HELP PLEASE HSBC 10yr FIXED RATE

jackiegibbo

Hi everyone i would appreciate some advice please.We will be changing our mortgage soon and i like the idea of a fixed rate one but my hubby is against the idea.I think i will be able to plan better if i have this set rate for a few years and my hubby thinks that at the end of thefixed rate we will be charged loads of interest if the rates go up during the 10yr period....
If the interest rates go up during a fixed rate period is all that added onto your mortgage at the end of the period or not?........SORRY IF IVE WAFFLED TOO MUCH!!!

kingkano

No its not added on at the end. Thats the gamble of a fixed rate (for you and the bank).

But as soon as the fix ends you need a new deal, and if rates have gone up alot it might be a shock.... but you will know plenty in advance if you keep your eye on the rates etc. Lets face it if rates went up all that much you'd be quids in from having the fixed rate

jackiegibbo

kingkano wrote: »

No its not added on at the end. Thats the gamble of a fixed rate (for you and the bank).

But as soon as the fix ends you need a new deal, and if rates have gone up alot it might be a shock.... but you will know plenty in advance if you keep your eye on the rates etc. Lets face it if rates went up all that much you'd be quids in from having the fixed rate

Thankyou for your help KINGKANO, I dont suppose you could help me with something else or any other mse's if poss........my current mortgage deal ends on the 31st july so does the new one start on that date or on the 1st of august

herbiesjp

Indeed - the solicitor/bank would make sure that the new deal started as soon after the first deal had expired as possible.

If going direct to the lender, you will need to make sure the lenders does this.

Starting the re-mortgage process now gives you plenty time to get everything set up in time for August 1st

HTH

The_Eternal_Optimist_2

Have you discussed capped rates with your husband? this is a tracker mortgage which tracks the bank of England base rate i.e. it can go up or down at the beginning of each month, but is guaranteed not to exceed a certain level, e.g. the cap

Skipton building society, woolwich, and Abbey all have them at present

jackiegibbo

The_Eternal_Optimist wrote: »

Have you discussed capped rates with your husband? this is a tracker mortgage which tracks the bank of England base rate i.e. it can go up or down at the beginning of each month, but is guaranteed not to exceed a certain level, e.g. the cap

Skipton building society, woolwich, and Abbey all have them at present

No i havent mentioned it yet,its just that we are soooo bad with money and i like the idea of knowing exactly how much will go out each month on the mortgage.I dont think hes going to be keen on a 10yr term but the 2yr term and 5yr one is a higher rate and i bank with hsbc so i can see my accounts online each day

kingkano

The_Eternal_Optimist wrote: »

Have you discussed capped rates with your husband? this is a tracker mortgage which tracks the bank of England base rate i.e. it can go up or down at the beginning of each month, but is guaranteed not to exceed a certain level, e.g. the cap

Skipton building society, woolwich, and Abbey all have them at present

Im not sure about capped rates. can somebody point out where Im going wrong, IF I am?

I looked at one last night on Abbey website capped at 5.68%, but you only benefit from a lower rate if their SVR drops below this (their svr is 7.34 so currently 2.12 above BOE). By my calculations that means to gain any benefit of the capped rate you'd need BOE rate to hit 3.5 or below..... surely better to get a cheaper fixed rate if you can??

mystic_trev

If I was getting a mortgage now, I'd certainly be taking a serious look at a Fixed rate. Interest rates may be going up to as much as 6% by the end of this year and the Money markets have priced in IR's as staying high for the next few years.