Nationwide v HSBC v Broker

movinghelp

Hi All,

So we're waiting to hear if we've had an offer accepted on a property and I'm just trying to get my head around mortgage options (FTB).

My boyfriend and I have spoken to our banks HSBC and Nationwide, to get an idea of what they could offer us. We're keen to do a 5 year fix (as per the last MSE email!) and have a 70% LTV rate.

HSBC have a 3.19% option with a booking fee of £399 and a overpayment allowance of 20% versus Nationwide's 2.99% rate with a £99 fee (reduced for FTB from £499) and a 10% overpayment.

NW also have a Flex offer which my OH has access to of 2.59% for 4 years with a £99 fee plus free standard valuation and legal fees.

SO - what do you think?? I have a meeting with Alexander Hall on Mon to go through broker options but they charge a £500 fee so unsure if we will go with them and have spoken to London & Country but can't go any further with them till offer is accepted.

Does anyone have any feedback on how quickly HSBC or NW progress - we want to complete by 1st Oct. Or should we be considering trackers as well??

dumpallhere

I hope you are aware that HSBC's overpayment allowance is 20% of the monthly payment, not on the outstanding balance.

AFAIK, the 5 year fixed rate product @2.99% (website) at Nationwide allows an overpayment of only £500 per month.

BTW, the 4 year flex is @2.59% or @2.89% fixed rate, as per their website, with 499 or 99 product fee respectively. The Flex products do allow overpayments of 10% of outstanding balance in a year.

movinghelp

Sorry this has confused me even more. The rates for a 70% LTV are 2.99 not 2.89 and for flex it's 2.59 or 2.89 not 2.49 and 2.79... Also the 499 would be reduced as part of their First Time Buyers discount of £500 on the product fee on selected mortgages (a non-refundable £99 upfront booking fee applies).

With regards to overpayments I know HSBC is 20% off the monthly, is this different for Nationwide? £500 a month seems incredibly high as does 10% of the outstanding balance.

dumpallhere

My bad ... I used a different LTV inadvertently for NW. My apologies!
You are right. Edited the previous post.

movinghelp

Ah no worries, was just concerned I'd got my sums wrong. So obviously NW is a better deal at the moment but if we want to overpay by as much as possible HSBC would make more sense (at 20% v 10%)?

dumpallhere

HSBC allows overpayments @20% of the monthly mortgage payment.
e.g. - if your monthly payment is £1000 then you can overpay upto £200 per month without incurring any penalty. That's £2400 a year.

When the overpayments allowed is a % of outstanding mortgage balance at the beginning of a calendar year, then the overpayments vary every year and the amount you can overpay reduces as the balance reduces over the length of the term.
e.g. - If your mortgage balance is £175000 at beginning of a year, you can overpay £17500 in that calendar year. That is ~£1458 per month.
As the mortgage balance reduces over time, the amount you can overpay in a year reduces too.

NW 5 year fixed rate product (2.99%) allows a fixed maximum overpayment every month, £500. That's £6000 a year (and remains the same throughout).

dumpallhere

If you have the ability to overpay regularly, then NW Flex is the best amongst the three, NW fixed in the middle, and HSBC is the least favorable (unless your monthly mortgage payment will be >£2500).

movinghelp

Ah I see, I thought the repayment of £500 a month stopped for any mortgages after 29 May 2013 (so thought both NW options had the same overpayment regulations):

http://www.nationwide.co.uk/mortgages/existingcustomers/overpayments.htm

But does it actually mean that you can do a fixed £500 a month OR a 10% overpayments of the original mortgage balance per year?

Either way it the Flex sounds like the best option as you also get the free standard valuation and legal fees.

dumpallhere

movinghelp wrote: »

Ah I see, I thought the repayment of £500 a month stopped for any mortgages after 29 May 2013 (so thought both NW options had the same overpayment regulations):

http://www.nationwide.co.uk/mortgages/existingcustomers/overpayments.htm

Thanks for that. Was unaware of this and the adviser at the bank didn't mention that either when we met him last month. Surprising!! Do double-check with bank.

In such case, yes, you can choose to overpay as much as you like (variable, as your circumstances permit MoM) ... upto a max. of 10% of the outstanding mortgage balance (at the beginning of the year) in a year.

movinghelp

We have a meeting with them on Sat, so hopefully will ask all these questions then.. Need to find out some info on the free legal fees and valuation offer as I'm confused about what this covers and what happens if the vendor pulls out??

highguyuk

Just to clarify, Nationwide limit USED to be max. £500 a month overpayment, but this has now changed to 10% (so likely better)