HSBC lifetime tracker at base + 1.89%

pinkteapot

Short version:

Salaries £54k and £31k. Deposit £225k. Mortgage required £225k.

We're HSBC customers and they'll do us a lifetime tracker at BOE base +1.89%, current rate 2.39%. £299 booking fee.

We've got an HSBC lifetime tracker on our current house and like it because we want to be able to make unlimited overpayments from the start.

Just wondered if anyone has come across any better deals recently?

ACG

If you want the ability to make unlimited overpayments then your unlikely to get a lower rate elsewhere. The fee is also pretty competitive.

If you want tailored advice then you would need to speak to a broker, but off the top of my head i cant think of lower rates which allow unlimited over payments at any loan to value (LTV).

kingstreet

What's the rate on your current mortgage? Is it lower, is it portable?

pinkteapot

Current mortgage is portable, but we're paying base+ +1.99%, so 0.1% more! Same product (lifetime tracker with HSBC) but we took it out three years ago. I'm pretty sure that when I looked a few months ago they were charging a bit more so we were going to port, but now that we can get a cheaper deal with a new mortgage we'll go down that route.

I like the unlimited OPs option. We'll do the same thing that we did with our current mortgage - take it out over a long term so that the standard monthly payment is low, just in case one of us ever loses our job or anything, but overpay significantly while the going's good (and rates are low!).

Our current mortgage was £100k when taken out three years ago and we've got it down to £35k. :money:

Mirno

Given you started with 100k and are now at ~35k you've been over paying to the tune of ~19k a year at a rough guess.

If you chose an appropriate fixed mortgage you'd have as good as unlimited (given your over payments of ~19k) for 3-4 years. There are products out there that allow overpaying by 10% of the outstanding amount.

It's then up to you as to whether the safety of a 5 year (or less) fix is worth more than that extra 2-4k you won't be able to overpay on years 4 & 5. Oh and how long you think interest rates will stay low of course!

Not wanting to discourage you from a tracker - I have the HSBC one - but like your current set up, it's for a hell of a lot less than 225k!

Mirno

pinkteapot

Thanks - I'll have a look into ones that let you overpay by 10% of the loan amount. It's a fair point that at the larger mortgage size we won't be overpaying by as much on a relative basis! A few years ago I had an HSBC fixed rate, and overpayments were limited to 10% of the normal monthly repayment.

You could increase your repayments by up to 10% but had to phone them and do that on a permanent basis. What I love about our current deal is that we just transfer money online from our bank account to our mortgage account whenever we like, in lump sums.

dimbo61

Have you looked at offset mortgages with Yorkshire BS ?
YBS have 5 year fixed offsets at 3.14% fee £345 or 2.89% fee £1345 if you are worried rate might rise in the next few years!
They also do a 5 year fix at 2.69% fee £1345 with 10% overpayment allowed.

I had a quick look at FD but you get better rates from HSBC which owns FD!

TWO 0.5% BOE rate increases in next 2/3 years ? What do you think?

You could use "whatsthecost" to work out the best deal for you! With a £225K mortgage
IE £225K at 3.14% over 25 years is £1,083 a month repay £325K( Offset)
£226K at 2.89% over 25 years is £1059 a month repay £318K (offset)
£226K at 2.69% over 25 years is £1036 a month repay £311K ( fixed)
Only rough guide as you hope to overpay every month

Make overpayments of up to 10% of your remaining loan every year from YBS website

pinkteapot

A thread on the house buying board has just potentially thrown a spanner in the works.... My job (I'm on the lower salary) is a fixed term 2 year contract ending in Feb 2015. My employer has said they'll make me permanent but hasn't done so yet, and probably won't before we're applying for mortgages.

Just remembered that HSBC are one of the strictest in terms of lending criteria so the above might put the kibosh on staying with them!

kingstreet

Has the contract been renewed at least once already?

TBH we never get to know HSBC criteria as we never get to use them, but if it has, I'd expect you to have little problem with a 50% LTV.

pinkteapot

Nope - I started in Feb 2013. I had a six month probation period which I passed. If we do decide to go with HSBC, I'll check out alternative deals as a fall-back in case my job causes a problem. And we won't be tempted to their cheapest rate which has a booking fee of something like £1,999!

kingstreet

HSBC or not, you'll still get a great "High Street" rate.