Hsbc interest only lifetime tracker advertised but not available!?

Roundhay

Hello, this is my first post so let me know if I'm in the wrong place!

Has anyone any knowledge or experience of applying for the HSBC lifetime tracker special interest only mortgage. Ltv 60%.

It is advertised on the website and when using the calculator we meet all the criteria. However upon being invited into the branch to discuss we were told (after an hour of asking when house insurance etc due) that interest only mortgages are not available unless you have a premier account (ie give them 50k of your savings). When we queried this with one of their mortgage specialists they quoted the policy but cannot send this policy out to us due to it being an 'internal document'.

Are they falsely advertising or has anyone been sucessful?

Is it worth opening the premier account and then removing the money back into higher interest account once the mortgage has been approved? Or will they insist on the premier account being open to keep the mortgage?

Thanks in advance for any replies!
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Thrugelmir

Roundhay wrote: »

Are they falsely advertising or has anyone been sucessful?

The holding of both a Premier account and £50k of savings was announced over 6 months ago. No secret.

kingstreet

Do you meet the other requirements;-

Interest only

With an interest only option, your monthly payment covers only the interest charged on your mortgage, freeing up cash to spend elsewhere or to invest to pay off your mortgage at the end of the mortgage term.

By repaying only the interest on your mortgage, your monthly repayments are lower than with an equivalent capital repayment mortgage.

Note: You are responsible for making your own arrangements to repay your mortgage at the end of the mortgage term. This could be through an endowment scheme or some other savings and investment plan. Your property may be repossessed if you do not have sufficient funds to repay the capital balance outstanding at the end of the term.

What you get with the Interest only option:

Interest only

The monthly payment covers just the interest and the original capital amount borrowed remains outstanding throughout the term of the loan

Lower monthly payments

Because you are not repaying the capital your monthly payments will be lower than with a capital repayment mortgage

Lending criteria

You must hold or open an HSBC Premier Bank Account and meet our HSBC Premier eligibility criteria.

Choose your mortgage loan term

Up to a maximum of 25 years

Lower borrowing limit

Up to a maximum of 75% of the purchase price or the valuation of your property (whichever is lower)

The maximum age on an interest only mortgage is 65 at the end of the mortgage term (subject to status). For joint applications this will be the maximum age of the eldest party.

Important Considerations

You must be able to demonstrate you have a suitable repayment vehicle in place.

Roundhay

Thanks for your answers.

Yes we meet all of the requirements apart from not being premier account holders at the moment.

The mortgage calculator online must not have been updated since this change in April, as it quite clearly gives multiple interest only mortgages, with some that have premier account stipulations and some that have none and state they have no qualifying criteria. Quite misleading to a novice like myself!

We can open a premier account but would then prefer to invest the 50k savings in our ISAs etc over the next few years. Removing the savings would no doubt downgrade us back to a standard current account, but would this affect our mortgage agreement?

Thank you!

kingstreet

Not a clue, sorry.

One you're going to have to ask them.

Roundhay

Since complaining to hsbc the mortgage info online now clearly states you need a premier account to get the interest only mortgages.

So we opened a premier account. I finally found the answer to my above question- once you pay the booking fee the rate is yours, even if the amount invested falls below the minimum to keep a premier account open.

I mistakenly thought we could remortgage and add me to the new mortgage (rookie mistake) therefore taking my earnings into account and not just have the mortgage in my husbands name (as is now - interest only rbs).

Ltv is 48% and we want to borrow £106,000. Yearly ISA investments to pay off the capital.
Husbands wage is £27,000 with no loans, credit cards etc. they insist on working out the mortgage offer including all household bills even though my husband only pays half towards them and most aren't even in his name. They even wanted to include £234 childcare which I pay via salary sacrifice out of my wage before tax.

Is this all normal? I'm sure you will all say it is but it seems ridiculous that someone earning £27000 with no debt can't get a mortgage offer for more that the £26000 (which is all they will offer!).

jamesd

Why would you not want to remortgage in both of your names, with the property also owned by both of you?

It's not something that will be free, assuming that he is currently the sole owner of the property. Stamp duty would be needed on the value of the consideration involved, if that is over the stamp duty threshold. The consideration is the value of the portion of the property or debt being transferred into your name. The stamp duty threshold of £125,000 means that in many cases there will be no stamp duty due.

kingstreet

Roundhay wrote: »

I mistakenly thought we could remortgage and add me to the new mortgage (rookie mistake) therefore taking my earnings into account and not just have the mortgage in my husbands name (as is now - interest only rbs)

You should be able to do this. It's a remortgage and transfer of equity.

james has mentioned some of the costs, the other one being you paying for the legal work for the TofE once the mortgage is agreed. Typically, it adds £400 to £600 to the cost, perhaps less if there's a free-legals remortgage involved.

Why are you unable to do this?

HSBC is an unknown to many brokers. We can't submit to them, so often we find their MO a little odd and difficult to fathom.

Roundhay

Thanks guys for replying.

The most unhelpful hsbc woman on the phone said if its a remortgage it has to be a straight transfer so we could only proceed if we had my name on it before we remortgage. So we have to add me on the RBS one first.
We would gladly pay the costs involved but we are on a bit of a time limit. Rbs deal to renew with them for a 2yr interest only runs out at the end of the month, if we let this run out and then hsbc offer us something equally pathetic with both our wages taken into account we'll have no interest only mortgage available to us.

Give up and renew with RBS?

jamesd

Sometimes the best reward for consistently poor customer service is to walk away before you've paid a fee to be locked into it.

Try looking on the brighter side. It took HSBC's mortgage processing team five tries and many months from agreeing the purchase before they got me a correct contract to sign for a First Direct interest only offset mortgage. I've no idea what their current times and problem rates are, though.

Roundhay

Typically the fee is only £99. We were going to move all banking to first direct but just realised they are they same group!