HSBC Remortgage + Borrow more

Simple.User

Hi all,

I currently have a HSBC mortgage. I have been with them for 5 years.

Currently not in a fixed term and paying their SVR.

I want to borrow £20,000 more for home improvements.

I just expected to remortgage and ask to borrow £20k more, but it seems that HSBC want to push me down the route of a Homeowner loan. This seems overly complicated to me. I just want to add it to my existing debt and remortgage with one product. I don't want the hassle of two products.

Is it possible just to add £20k to my existing or do I have to get a homeowner loan? If I moved to a new provider would I be in a different situation?

Many thanks

YHM

HSBC are different in that they consider anything other than the original mortgage, as effectively a secured loan. This doesn't mean anything other than the fact it has its own direct debit and account number.

However, as you are on the SVR, it would make sense for you to sit down with a broker and remortgage elsewhere. This would most probably save you quite a bit of money on the main as well. You can remortgage and release the extra 20k, without to many issues.

Simple.User

Thanks for your quick response.

1. If i was to take out this homeowner loan with HSBC, fix for 2 years, and then in two years came to remortgage elsewhere (Natwest/Post Office for example), would the new provider consolidate both the main mortgage, and the homeowner loan into one product without any fuss?

2. If i was to take out this homeowner loan with HSBC, fix for 2 years, and then in two years came to remortgage, would HSBC keep the two separate, or at this point would them be happy to consolidate?

Thanks

YHM

In answer to the above

1. Yes, most other lenders would consolidate into one product.

2. HSBC would insist on separate products. They put it down to how they report their business to both their central reporting lines and to the FCA.

I'm ex HSBC staff, so I know how much of a ballache it used to be having to itemise separate products.

Simple.User

Thanks again for the quick response.

Sounds like you know what you're talking about in terms of your previous role!

Aside from a rate reduction, are there any other downsides with me sticking with HSBC and having separate products in this way? I can't think of any, and as long as other lenders would deal with them in the future, it seems this should be an OK path if I chose to go down it.

I don't want to end up 2 years on from now when the fix comes to an end, not being able to move elsewhere. Obviously in two years we could be very different to where we are now in terms of rates/products, but right now this seems to be a path I could continue down without any major pitfalls.

I do all of my banking with HSBC, and my property is slightly complicated, so I could save £10-£20 a month by moving elsewhere. But in terms of hassle it may well make sense for me to continue using them.

Mortgage_Adviser

HSBCs rates are ones of the market leading/market leading.
It is very inlikely that it woiuld be worth switching from them as you would be unlikely to find a deal elswhere betaing HSBC by more than say 0.1%.
Take all the fees you will face for remortgaging and very likely you will be making a loss by remortgaging anhywhere else.
I do not see how 2 direct debits will be making any difference to you.