HSBC 2.79% 10 year fix

darich

I’m currently on a variable rate mortgage with Nationwide which is 2% above BoE rate. So right now I’m paying 2.5%. There’s around 89k outsanding and 15 years to go costing me about £600 per month.
I see that HSBC are offering a 2.79% fixed rate for 10 years with no arrangement fee and am tempted by it.
I know my costs would climb a few pounds to around £605 or £610 but it would be set for 10 years. By that time in 2026 I’d have around £34k remaining and only 5 years to go (assuming no overpayments of course). Easy to remortgage again and get another good deal
Added to the above I live in Scotland....and with indyref2 looming, coupled with Brexit, there’s clearly a lot of uncertainty either here or in the near future.
Would transferring my mortgage to HSBC and the 10 year fix be a reasonable decision?

cahillg81

Personally I'd be weary of a 10 year fix.


When does your current NWBS deal end?

frazell

Personally I'd leave some flexibility to remortgage given the possible fluctuation on rate over the next 10 years and go with a shorter product.

Have you considered trying to reduce your monthly payments and then overpaying as much as possible. With "only" £89000 left you could make some serious dents in that by overpaying even by modest amounts.

Thrugelmir

darich wrote: »

Would transferring my mortgage to HSBC and the 10 year fix be a reasonable decision?

How likely are you to remain in the property?

Do you meet HSBC's criteria as a customer? While the offer looks good it's directed at a particular segment of the market.

darich

cahillg81 wrote: »

Personally I'd be weary of a 10 year fix.


When does your current NWBS deal end?

I'm currently not tied to any deal. I'm on nationwide standard variable rate of 2% above bank of England. I can leave anytime or overpay by any amount and not incur penalties

darich

frazell wrote: »

Personally I'd leave some flexibility to remortgage given the possible fluctuation on rate over the next 10 years and go with a shorter product.

Have you considered trying to reduce your monthly payments and then overpaying as much as possible. With "only" £89000 left you could make some serious dents in that by overpaying even by modest amounts.

I understand the logic...but can it really go any lower?
Current payment of 600 is not difficult...but with brexit and indyref2 I see a lot of uncertainty on the horizon and getting a fixed deal does have some appeal.

darich

Thrugelmir wrote: »

How likely are you to remain in the property?

Do you meet HSBC's criteria as a customer? While the offer looks good it's directed at a particular segment of the market.

Likely to leave?? Only when I'm in a box!!
I think the LTV is 65%. I'm in that area depending on my house value. I'd need to read the criteria more fully but based on the LTV I should be OK. I could even move my current account if required.

SavingSteve

You've made your mind up. With these things it's a gamble, you're betting that the 2x 5 year deals will cost you more than 1x 10 year.

Based on what you've said you'd be slightly upset if you went for a 10 and then it turned out that cost you more, but you would be kicking yourself non stop if you went for a 5 and ended up worse off.

It's all around your willingness to risk, but reading your comments I'd say you want a 10 year, and there's nothing crazy about that decision.

cahillg81

I done a few comparisons today Darich for a customer who is looking at a 10 year deal, interest only. I showed him that if he took 2 year options and repaid the difference between the 10 year fixed price and if interest rates remain stable over 10 years using the overpayment facility he'd have saved 56k on interest on a loan of circa £190k.

Personally, I don't foresee mortgage interest rates going up anytime soon. I think with the uncertainty its likely we will see another drop before the market levels out late 2018 early 2019.

I also can't see the SNP calling for Indyref2 in the next 3 years. Obviously this will depend on when article 50 is implemented but again I think that is unlikely to happen in the next year and its going to take 2 years for the negotiations to conclude. With that uncertainty i see mortgage rates remaining fairly stable.

This is all just opinion and I have no crystal ball but I've been fairly accurate with my market predictions in the last few years.

cahillg81

I should add their were a number of assumptions based around moving to the SVR at the end of the 10 year deal.

AnotherJoe

darich wrote: »

Added to the above I live in Scotland....and with indyref2 looming, coupled with Brexit, there’s clearly a lot of uncertainty either here or in the near future.

All of which points to lower rates. "Uncertainty" does not automatically mean "higher rates" which is the implication of your comment? I'd say the uncertainty is about how low rates will go rather than if they will go up. I think you'll spend the first half of the five years paying an extra percent which will be really tough to recoup in the second half should they go up, and also lock you in with an expensive ERC.