Fix Ending November 2023

Holly_Kipper

Hi All. 

We are beginning to panic! 

Last week I rang HSBC to talk about coming out of our 2.15% fix early and paying a ERC charge which is £1060. 

They explained current rate was 3.93%, however couldn’t offer us an appointment until Monday 3rd October. 

We spoke with our mortgage advisor Monday who told us to hold fire as basically throwing our money into the fire and instead pay £1000 into our mortgage and anything extra we can contribute each month. 

Last night I decided to look at HSBC fixed rates again = 5.64% now making us £200 worse off per month 😩

*Do we just pay now to come out and fix onto the 5.64% 

* Overpay as much as we can 

* Stay as we are, save as much as we can and review start of next year/nearer to November 23

We also have a smaller mortgage with HSBC that we had when we moved in 2020 (5yr fixed) and the 2023 mortgage we ported over therefore I believe changing lenders isn’t an option

I know no one knows the future and I know overall it would be our decision, but what would you do in our position? 

K_S

@hollykipper Given the stress that the situation appears to putting on you, what I would recommend you considering is to get the best remortgage offer that you can get from another lender. Most mainstream remortgage offers will be valid for around 6 months and can be done without any upfront fees (so you're not risking anything if you decide not to proceed).

When it comes to 5 months down the line, you can reassess what rates look like and whether or not it makes sense to  pay the ERC and complete on the remortgage (move to the new lender). With HSBC you have extra flexibility as their ERC is pro-rated unlikely other lenders.

Holly_Kipper said:

Hi All. 

We are beginning to panic! 

Last week I rang HSBC to talk about coming out of our 2.15% fix early and paying a ERC charge which is £1060. 

They explained current rate was 3.93%, however couldn’t offer us an appointment until Monday 3rd October. 

We spoke with our mortgage advisor Monday who told us to hold fire as basically throwing our money into the fire and instead pay £1000 into our mortgage and anything extra we can contribute each month. 

Last night I decided to look at HSBC fixed rates again = 5.64% now making us £200 worse off per month 😩

*Do we just pay now to come out and fix onto the 5.64% 

* Overpay as much as we can 

* Stay as we are, save as much as we can and review start of next year/nearer to November 23

I know no one knows the future and I know overall it would be our decision, but what would you do in our position? 

IvyFlood

We are with Nationwide and our 2.64% fix expires 30th September next year. We have already made the decision to pay ERC which is approx. £1400 and remortgage elsewhere as the current Nationwide rates (even for existing customers) are just stupid!

We have an appointment with a broker next week and hopefully he'll find us a better deal.

Holly_Kipper

Thank you K_S for your reply! 

Sorry I should of also said this on the original post, we also have another mortgage (smaller 5yr fix) that we had for when we brought our house in 2020, the mortgage ending 2023 we ported over. 

I believe we are unable to use any other lender? 

aoleks

our fix ends next Nov 23 as well, but the current one is on an extremely good rate. what we might do is overpay the mortgage massively, but I'm not giving up the low rate I have at the moment, a lot can happen until November. I know I will pay more and luckily we can afford rates of up to 8%, but I think things will calm down by early 2024, so we might go with a discounted tracker for a few months, see what the market does.

in the meanwhile, we'll try to add as much value to the house as possible (extension, downstairs toilet, driveway, landscaped garden, insulation) to reduce the impact of any potential price decrease.

K_S

Holly_Kipper said:

Thank you K_S for your reply! 

Sorry I should of also said this on the original post, we also have another mortgage (smaller 5yr fix) that we had for when we brought our house in 2020, the mortgage ending 2023 we ported over. 

I believe we are unable to use any other lender? 

@holy_kipper That does change the calculations as you would need to pay around 2-3% ERC on that part if you wanted to change lenders so it might not make sense.

I can't really tell you what to do but I can tell you that HSBC will allow you to schedule a product-switch to kick in for up to 120 days in the future. So if you did decide to swallow the ERC and apply for a switch today, you could ask them for the switch to kick in only around late January, giving you a few more months on a low rate and reducing the ERC payable.

HSBC has quite flexible policies with regard to retirement age and term, so you could potentially also look at extending the term to reduce the monthly payments. 

Holly_Kipper

K_S said:

Holly_Kipper said:

Thank you K_S for your reply! 

Sorry I should of also said this on the original post, we also have another mortgage (smaller 5yr fix) that we had for when we brought our house in 2020, the mortgage ending 2023 we ported over. 

I believe we are unable to use any other lender? 

@holy_kipper That does change the calculations as you would need to pay around 2-3% ERC on that part if you wanted to change lenders so it might not make sense.

I can't really tell you what to do but I can tell you that HSBC will allow you to schedule a product-switch to kick in for up to 120 days in the future. So if you did decide to swallow the ERC and apply for a switch today, you could ask them for the switch to kick in only around late January, giving you a few more months on a low rate and reducing the ERC payable.

HSBC has quite flexible policies with regard to retirement age and term, so you could potentially also look at extending the term to reduce the monthly payments. 

Sorry, so just to confirm that with our appt on Monday if we was switch to the new current rate of 5.64% and pay the ERC (reduced by Jan), this however will not have to commence until Jan 23? 

What if say by then the rate is slightly better at 4.9% can I have withdraw that offer and say I want the 4.9% mortgage? 

HSBC currently seem to have higher rates than NatWest etc. 
Yes we thought we might put it upto 35years, just for now and when at a better rate in the future reduce back down. 

K_S

Holly_Kipper said:

K_S said:

Holly_Kipper said:

Thank you K_S for your reply! 

Sorry I should of also said this on the original post, we also have another mortgage (smaller 5yr fix) that we had for when we brought our house in 2020, the mortgage ending 2023 we ported over. 

I believe we are unable to use any other lender? 

@holy_kipper That does change the calculations as you would need to pay around 2-3% ERC on that part if you wanted to change lenders so it might not make sense.

I can't really tell you what to do but I can tell you that HSBC will allow you to schedule a product-switch to kick in for up to 120 days in the future. So if you did decide to swallow the ERC and apply for a switch today, you could ask them for the switch to kick in only around late January, giving you a few more months on a low rate and reducing the ERC payable.

HSBC has quite flexible policies with regard to retirement age and term, so you could potentially also look at extending the term to reduce the monthly payments. 

Sorry, so just to confirm that with our appt on Monday if we was switch to the new current rate of 5.64% and pay the ERC (reduced by Jan), this however will not have to commence until Jan 23? 

What if say by then the rate is slightly better at 4.9% can I have withdraw that offer and say I want the 4.9% mortgage? 

HSBC currently seem to have higher rates than NatWest etc. 
Yes we thought we might put it upto 35years, just for now and when at a better rate in the future reduce back down. 

@holly_kipper The up to 120 days delay is indeed the case for when I do a PT for a client. I assume it would be the same for a direct PT, but you'll need to confirm that with the person you speak to. Same with the second question, it's possible for broker PTs but please do confirm the same with them direct.

aoleks

I just had a look at HSBC's product switch and the best I can get, after paying ERCs and overpaying a bit to reduce LTV to 80% is 5.01%, which is nuts.

I believe for most people, keeping their fix until the end of 2023 will be the best (and only) option.

simon_or

If you're paying an ERC anyway, I can see Lloyds 3.73%, Halifax 4.3%, etc.

aoleks said:

I just had a look at HSBC's product switch and the best I can get, after paying ERCs and overpaying a bit to reduce LTV to 80% is 5.01%, which is nuts.

I believe for most people, keeping their fix until the end of 2023 will be the best (and only) option.

CSL0183

Holly_Kipper said:

Hi All. 

We are beginning to panic! 

Last week I rang HSBC to talk about coming out of our 2.15% fix early and paying a ERC charge which is £1060. 

They explained current rate was 3.93%, however couldn’t offer us an appointment until Monday 3rd October. 

We spoke with our mortgage advisor Monday who told us to hold fire as basically throwing our money into the fire and instead pay £1000 into our mortgage and anything extra we can contribute each month. 

Last night I decided to look at HSBC fixed rates again = 5.64% now making us £200 worse off per month 😩

*Do we just pay now to come out and fix onto the 5.64% 

* Overpay as much as we can 

* Stay as we are, save as much as we can and review start of next year/nearer to November 23

We also have a smaller mortgage with HSBC that we had when we moved in 2020 (5yr fixed) and the 2023 mortgage we ported over therefore I believe changing lenders isn’t an option

I know no one knows the future and I know overall it would be our decision, but what would you do in our position? 

What poor advice, I think anyone worth their salt could see it coming. 

You should still be able to fix at around 4% though. Speak to a broker or search around.