HSBC 0.99% fixed rate mortgage

Thrugelmir

mwpt wrote: »

Yes and you need to count the fees into the cost. These two year fixes make fantastic sense at higher property values where the fees are a small fraction of the overall cost, but far less sense on cheaper properties. For me, I just moved to a new product after my initial two year fix ended. I paid a £900 transfer fee and it did make sense as opposed to a higher interest rate lower fee deal.

I also have the consideration that I want to remain fairly nimble to trade up if possible, so going for longer fixes tying me in isn't what I want.

Funding for lending scheme (mortgages) ends in 2018. Then lenders have to start repaying the cheap finance provided by the BOE from other sources. BOE has engineered a breathing space allowing banks to contract their balance sheets to meet Basle III requirements in 2019.

poppy10_2

michaels wrote: »

If it is costing you to keep money in gilts then why not try to shovel it out the front door at 1% instead?

Because there is a higher risk of not getting your money back if you are lending it out against an overinflated property market, as opposed to gilts

wotsthat

poppy10 wrote: »

Because there is a higher risk of not getting your money back if you are lending it out against an overinflated property market, as opposed to gilts

You're guaranteed not to get your money back in gilts.

This rate isn't indicative of anything other than lenders continue to chase good risks. Haven't checked but assume the deposit requirement is quite high and, of course, the upfront fee needs to be considered when pricing the risk.

buglawton

cells wrote: »

You are probably right and I'm probably not using good jugment when I think this but I simply don't like that the directors of a corporate can effectively bankrupt a company with one signature or award themselves £600 million bonuses for doing nowt like the recent story of the directors of one of the building companies.

Perhaps a new 'conflict of interest' offence needs putting on the statute book. Something along the lines of what Andrea Leadsom was saying in her TV pitch.

mwpt

wotsthat wrote: »

You're guaranteed not to get your money back in gilts.

Am I missing something? You do get your money back at maturity.

cells

buglawton wrote: »

Perhaps a new 'conflict of interest' offence needs putting on the statute book. Something along the lines of what Andrea Leadsom was saying in her TV pitch.

I don't think there is anything you can really do its the risk you take in being a passive business investor rather than an active one.

Of course you can try to factor in that risk when deciding to make the investment and I'm sure in reality the risk is a lot lower than I imagine and certainly manageable

wotsthat

mwpt wrote: »

Am I missing something? You do get your money back at maturity.

Best guess is you've missed nothing but simply slipped into pedant mode.

mwpt

wotsthat wrote: »

Best guess is you've missed nothing but simply slipped into pedant mode.

:undecided

I genuinely didn't understand what you meant. I must admit, I hadn't been following the conversation, I'll butt out now.

michaels

mwpt wrote: »

Am I missing something? You do get your money back at maturity.

Nope - with a negative yield you get bet the face value of the gilt bt by definition of negative (absolute) yield, you pay more than face value for it

wotsthat

mwpt wrote: »

:undecided

I genuinely didn't understand what you meant. I must admit, I hadn't been following the conversation, I'll butt out now.

Sloppy language. Yes it's guaranteed capital will be returned with gilts if only nominally which isn't the case with a lent mortgage but if gilts are giving a negative real yield then maybe it's understandable why lenders are willing to lend to achieve a positive real yield.