Is This Normal?

billchecker1

Brought a house in December 2013 with a 10% deposit right at the top of our salary limit. Applied to HSBC and we were happy when we got a two year fix at 3.64%. Price paid for house was £250K. I overpaid by £30 every month with the intention over time to slowly increase it.

Mover forward to July and I get a renewal notice from HSBC. They check against the halifax price index which says that the value of my house is now £280K, due to this my LTV is now 77% and therefore eligible for better rates.

The options they then gave were a 2 year fix for 1.99% with a £299, i was happy to say the least!

Got the forms signed and had been lazy in sending it when on the bank called to discuss my mortgage. I thought they were calling for me to get a move on but it was to sell me some bank accounts (which incidentally i didnt take). Anyway far more importantly she said that i could actually get an even cheaper rate of 1.84% if i contacted the mortgage call centre which i promptly did.

The upshot of this will be that next month my mortgage will drop over £200. Even with me electing to over pay by the max 20% i will still have a lower mortgage.

Is this normal?

I feel extremely lucky to have halved my interest and gained a massive increase in my equity, this in the space of 18 months to what I though was already a good deal.

stephenni1971

billchecker1 wrote: »

Brought a house in December 2013 with a 10% deposit right at the top of our salary limit. Applied to HSBC and we were happy when we got a two year fix at 3.64%. Price paid for house was £250K. I overpaid by £30 every month with the intention over time to slowly increase it.

Mover forward to July and I get a renewal notice from HSBC. They check against the halifax price index which says that the value of my house is now £280K, due to this my LTV is now 77% and therefore eligible for better rates.

The options they then gave were a 2 year fix for 1.99% with a £299, i was happy to say the least!

Got the forms signed and had been lazy in sending it when on the bank called to discuss my mortgage. I thought they were calling for me to get a move on but it was to sell me some bank accounts (which incidentally i didnt take). Anyway far more importantly she said that i could actually get an even cheaper rate of 1.84% if i contacted the mortgage call centre which i promptly did.

The upshot of this will be that next month my mortgage will drop over £200. Even with me electing to over pay by the max 20% i will still have a lower mortgage.

Is this normal?

I feel extremely lucky to have halved my interest and gained a massive increase in my equity, this in the space of 18 months to what I though was already a good deal.

The figure your lender are quoting is an assumption based on overall house price increases. The actual value of your house will likely be different. What you can see at the minute is an increase on paper only.

dimbo61

You still have a better deal and another 2 years security at a cost of £299.
If you overpay by £230 a month and you might be 75% or even 70% in 2 years time

billchecker1

stephenni1971 wrote: »

The figure your lender are quoting is an assumption based on overall house price increases. The actual value of your house will likely be different. What you can see at the minute is an increase on paper only.

No I understand that this simply a paper figure. What I am saying is that this has a massive impact on my finances both on the amount owed as well as my ability to pay it off through a massively decreased rate. It will actually have an impact in years to come.

billchecker1

dimbo61 wrote: »

You still have a better deal and another 2 years security at a cost of £299.
If you overpay by £230 a month and you might be 75% or even 70% in 2 years time

I am hoping so! I mean i only need to pay another 3% off to reach 75% which is around £8370. If the house price index goes up by even 1% i should acheive this.

It seems a great time to be a house owner!