Skipton Mortgage @ 3.13% with £1,000 cash back OR HSBC @ 1.59% with £1,016 Arrangement Fee

FrankRizzo

Hi,

I am looking to get a next time buyer mortgage and trying to figure out what one of the two mortgages below is the better deal - I am really stuck, can anyone please help? Looking to borrow £100,000 repayment mortgage fixed for 2 years.

Skipton Mortgage @ 3.13% with £1,000 cash back
HSBC @ 1.59% with £1,016 Arrangement Fee

Any help appreciated!

Thanks

amnblog

You've narrowed it down then, comparing a Tracker with cash back against a fixed with a product fee is not the way to go.

Decide first what your priorities are.

FrankRizzo

I think they are both Fixed for 2 years?

Why is it wrong to compare one with a product fee with one that offers cash back? The priority is to go with one thats going to be the cheapest over the 2 years.

getmore4less

Missing information.

Planned payment?

Beeboo23

What’s the full term of the mortgage?

CardiffCrank

Also I wonder about the rate at the end. Does HSBC offer a lower variable rate? If circumstances were to change you might be glad of that difference if you couldn't remortgage.

It's not just cost over two years, look at the outstanding balance at the end of the two years also.

FrankRizzo

Beeboo23 said:

What’s the full term of the mortgage?

18 years.

FrankRizzo

CardiffCrank said:

Also I wonder about the rate at the end. Does HSBC offer a lower variable rate? If circumstances were to change you might be glad of that difference if you couldn't remortgage.

It's not just cost over two years, look at the outstanding balance at the end of the two years also.

I would be switching at the end of the 2 years to get best rate

FrankRizzo

getmore4less said:

Missing information.

Planned payment?

Sorry for being thick but what do you mean about "planned payment"? Thanks

getmore4less

NOTE this post was wrong as it used 2y6m not 2y

The calculation is based on the payments you make.  the default is based on term but many people overpay and that changes the result.

For £100k on a 2year fix over  full term 18years 

After 2 years adjusting for the cash back or fee
Adjust if you are paying the fee up front, take it off the other one)
 

amount	rate	payment	owing
£99,000.00	3.13%	£606.15	£88,157.73
£101,016.00	1.59%	£606.15	£86,571.29

£1,586 better off with HSBC

if you were paying say £1k per month

amount	rate	payment	owing
£99,000.00	3.130%	£1,000.00	£75,884.26
£101,016.00	1.590%	£1,000.00	£74,525.93

Saving drops to £1,358

getmore4less

Just realised there is a significant error in the above
I had an old setting for one of the inputs(2y6m not 2y).

amount	rate	payment	owing
£99,000.00	3.130%	£606.15	£90,394.49
£101,016.00	1.590%	£606.15	£89,506.31

£888 better with HSBC

amount	rate	payment	owing
£99,000.00	3.130%	£1,000.00	£80,653.04
£101,016.00	1.590%	£1,000.00	£79,908.46

£744 better with HSBC