How long to fix for? Not straightforward

James19791

I currently have a mortgage by myself with HSBC for my flat of £48,000 with a valuation of £285,000 giving a LTV of only 17%. I believe 15 years left.  My current rate ends on 30/9. 

I expect to sell and buy a house with my partner within 2 years so I'm not sure what to do now.  I want to fix for 2 years at  3.29% (fee saver, no booking fee) but know that I would have to pay ERC if I do decide to buy with my partner as I assume it would be a new mortgage application for the two of us. 

ERC with HSBC is 1% per year left, over the overpayment amount but it's still not an insignificant amount.

We might decide to buy together within a year but complicating this is that my leasehold flat has management company problems at the moment putting off buyers which our residents association is trying to rectify.  This might take a while to sort during which it might be better to stay put as the problems will affect my flats value.  I expect to be able to sell just not at full price.  

 Any advice?  Thanks.  

simon_or

Personally, I don't see much of a quandary here since the loan size is quite small.

If you switch to a new HSBC 2 year fix and plan to move with your partner one year later - best case scenario you can port the HSBC mortgage and take additional borrowing on top, you may be able to do so even if adding a new applicant.

Worst case scenario, if you're not able to port, you end up paying 1% ERC, which comes to £480 for a £48,000 mortgage, a relatively small amount in the context of a house move.

If you don't want to risk any ERC at all and are sure that you will need to move soon, then change to a no-ERC HSBC (or another lender) tracker, with the risk being that the rate will rise with the BOE rate.