Remortgaging help need

nge101

Hi,

I currently am on a life time fee free tracker with HSBC. It is pegged at 1.99 above base rate (so 2.49). I bought last year and the remaining balance on the mortgage is £170K. The property is worth circa £420K.

I am convinced rates are going to go up towards the back end of 2014 (just my opinion obviously) and am looking to fix down before longer term fixes go up.

I'm looking at 5 year fixes and I think I'm going to go with the Barclays / Woolwich 5 year loyalty fix (I bank with them) which is 2.88 for 5 years with a £499 fee (which I'll pay upfront). I'll also overpay the maximum amount allowed which is annoyingly only 10%.

I have two questions:

1. Is this the best rate around? I've looked around a bit and it seems like it is (there are some slightly lower rates but they come with fairly hefty fees)

2. Realistically in around 2-3 years time, I may look to move to a larger (and more expensive) property. I have been told my mortgage is portable, does this mean I'll be able borrow more money should I need to? (presuamably at the rate of the time)

Any help is appreciated.

dimbo61

That is a very good deal you are on right now.
You need to take into account the total costs of remortgaging to a new lender so legals, survey, fees, exit fees, searches, chaps fees, and the stress involved.
You talk about overpaying and the 10% Limit but that would still be £17K in year one of the fix BUT you have unlimited overpayments on your tracker !
I would stick with HSBC and fill cash ISA,s and regular savers, then overpay every spare penny to build up equity and a cash pot to pay for all the costs when you do move property.
Rates will go up but the more you overpay the less this will effect you and you can always cash in the savings to pay a lump sum off.
Only my views :-).

dimbo61

Your lender may well say now your mortgage is portable but things change almost every day so they may refuse extra lending or the rates maybe high so why take the risk of paying 2/3/4/5% exit fee to switch lenders when you do not have exit fees now ?
Getting a bigger mortgage will depend on income, age, dependants ,LTV, affordability and the lenders ability to lend ( Think COOP, NRAM, Bradford and Bingley, etc )

nge101

Thanks for the advice!

By 10%, is it not 10% of the monthly amount?

Ie my monthly repayments are £795, so I could overpay up to £79.50 per month as a maximum.

Legals and surveys are taken care of.

The fees would be £499 product fee and £35 fee for the transfer fee. No ERCs with my HSBC mortgage.

Yorkie1

It's usually 10% of the outstanding balance at the start of the year - you'd need to double check this though.

Thrugelmir

Foward guidance by Mark Carney suggests early 2016 for the first base rate rise on current economic data.

No market commentator is expecting end of 2014.

amnblog

do HSBC not give you a switch to fix option?

demontfort

Thrugelmir wrote: »

Foward guidance by Mark Carney suggests early 2016 for the first base rate rise on current economic data.

No market commentator is expecting end of 2014.

Off topic here but Carney is a disgrace and wants to follow in the footsteps of the US by turning the UK into a bloated debt ridden economy which is only kept going on life support by property speculation and credit addicted shopaholics. So it’s another 2-3 years of mickey mouse interest rates and tax payer funded sub-prime schemes just to stop the housing bubble from going pop. We can only hope that the government does the right thing long before then and ships shyster Carney back to Canada.

nge101

amnblog wrote: »

do HSBC not give you a switch to fix option?

Don't think so, what is that?

Their closest 5 yr fix option is 2.99 with a 999 fee (although you get 500 cash back I think)

Thrugelmir

demontfort wrote: »

Off topic here but Carney is a disgrace and wants to follow in the footsteps of the US by turning the UK into a bloated debt ridden economy which is only kept going on life support by property speculation and credit addicted shopaholics. So it’s another 2-3 years of mickey mouse interest rates and tax payer funded sub-prime schemes just to stop the housing bubble from going pop. We can only hope that the government does the right thing long before then and ships shyster Carney back to Canada.

I agree that it's totally off topic. As is full of factual inaccuracies.

kingstreet

nge101 wrote: »

I currently am on a life time fee free tracker with HSBC... I am convinced rates are going to go up towards the back end of 2014 (just my opinion obviously) and am looking to fix down before longer term fixes go up

Do you face any early repayment penalties to move to a fixed rate with your current lender?

If not, why not wait until rates look like they might increase, then ask your current lender for a fix?

This would allow you to maximise your tracker savings, rather than have you fix on higher payments now, when you don't need to...?

FWIW no Government trying to get re-elected is going to see its Central Bank raise rates in the run-up to a General Election (no later than May 2015).