Mortgage rate of interest fallen

Davina_Hart

Hi,


We have mortgage offered with HSBC bank when the interest rate was 2.09% for 2 year fixed but now the rate of interest has fallen to 1.99%. I spoken to the lender who have said they would not offer us the revise rate of interest unless we go through a new mortgage application with them.


I don't understand why we are required to make a new application when the current one has recently made and we haven't yet completed on the property.


Just want to know if anyone else had similar issue with any other lender.


Thanks

Trying_to_be_good

They'll have provisionally reserved funds for you from the 2.09% pot of money.

If the rate had gone up, would you be happy to pay a higher rate?

If you've the time, and the sums work with any extra fees involved, apply again. Otherwise, you've still got a great rate for 2 years.

Thrugelmir

Is the mortgage a fee or fee free product?

amnblog

Many lenders adopt the same approach.

MortgageMamma

Davina

Its because when you make a mortgage application for a fixed rate product the lender has to book and buy funds at that days price, and the price they buy at can change quickly. That's why they are not flexible with it, - like someone said if you calculate the extra interest you'd be paying over two years with the different rates, then factor in the application fee that you will lose, you will see if its worthwhile the hassle of starting again for. It probably won't be to be honest but that's your call.

Davina_Hart

@ Thrugelmir - There is a fee for the mortgage. It was £1499 when we made the application at 2.09% interest rate but as I mentioned in my first post the rate has fallen to 1.99% but the product fee remains same.

Davina_Hart

@ Mortgage Mamma, Thank you, I will visit HSBC branch next week to gauge what are my options and whether its worth doing the new application. If they don't charge the product fee again then I guess I would make the new application otherwise I will leave it as is.

dimbo61

Divide £1499 by 24( months) and work out cost.
Work out mortgage at 2.09% and 1.99% over term and see if you save more than £1499 over the 24 months
Use "whatsthecost"
Bank staff may struggle with that

megaginge

Davina_Hart wrote: »

@ Mortgage Mamma, Thank you, I will visit HSBC branch next week to gauge what are my options and whether its worth doing the new application. If they don't charge the product fee again then I guess I would make the new application otherwise I will leave it as is.

They will charge the product fee again. You'd be paying for a new product.

You may also have early repayment charges if you're stll in your fix.

All of this is clearly explained in the key facts when you took out the product.

0.1% is nothing, stop worrying about this and move on ... Remortgage when your deal is due to expire and not before (unless circumstances change)