Help with deciding the best mortgage HSBC

mbrightman63389

Hello I am a new member looking for a little advice for our mortgage please.
We have found a property we wish to buy and we are just trying to get a mortgage in place for it. The property purchase price is £129k, we will have £15k equity from our own house sale, so will be working on a 90% LTV. Our current mortgage is with HSBC and having compared the rates HSBCs special 2 year discount mortgage with a rate of 1.99% seemed to be coming up as the best option, the only problem is there is a £1499 booking fee for this which is an upfront cost that we really could do without. HSBC also do a 2 year fixed rate of 3.94% which only has a £199 booking fee and also has a £1000 cashback deal with it. The monthly payments over 25 years would be £491 with the discount mortgage and £580 with the fixed one. Can anybody give us some thoughts on what the better option might be? We are wanting to spend some money on our new house so it would be good not to have to pay the huge booking fee but is it worth the extra £89 per month. Also we are not adamant about having a HSBC mortgage if anyone knows of a good alternative.
Sorry if this doesn't make much sense, I know it's a lot of reading, I would really appreciate anybodys advice
Thank you
Matt

Verix

There are other lenders available that might be worth looking at. Skipton BS have a 3.19% no fee (also no cashback) product you could look at? I think you'd need to decide how appealing the extra £1000 would be to you.

dimbo61

Well both are 2 year deals.
With the tracker you have a £1500 fee.
With the fix you have £800 cash back after paying £199 fee.
That is nearly £2300 difference over 2 years
That is £96 a month saved.
So the fix works out cheaper and no worries about Interest rate rises for 2 years.
Have you considered a longer fix for security as you are taking out a £116,000 mortgage.

mbrightman63389

Thank you both. The extra £1000 would come in very handy with all the decorating and new things to buy for the house. The £96 a month saved outweighs the extra £90 per month we'd be paying and means we would have the money to spend from the start. I think the fixed rate is sounding like the way to go. I am also considering making it a 30 year term rather than a 25 year one to bring monthly payments down. What do you both think?

Thank you

Verix

Again I think that you're the only one who can really answer which term would be best for you.

Do you think you'd notice that extra £60 per month you would save by extending the term vs how much you'll be paying back in the long run. Personally I would want to go for the lower term (i'm the sort of saddo who gets a thrill out of playing with the MSE mortgage overpayment calculator and seeing how quickly I can clear my debt).

There isn't a right or wrong answer here, it just depends on your priorities.