Switch with current lender or wait on offer from new lender?

MoneySavingDummy

Hi. I'm just wondering what other people would do in my situation. I currently have a mortgage of £215,000, which is in 2 parts; £100,000 fixed period ends 31 Dec 22 and £115,000 ends 30 Nov 23. I initially secured a rate switch with my current lender (HSBC) on part 1 at 3.78% for 5 years. With further consideration to increasing interest rates and not wanting to find myself in a situation next year where the mortgage becomes unaffordable, I decided it would be safer to pay the ERC on part 2 and fix both parts with another lender.

My broker submitted an application to Barclays on 14 Sep for a 7 year fix at 3.49%. My broker has not heard anything from Barclays since.

So I have 2 options open; My preferred being Barclays and the backup of the rate switch offer with my existing lender. The rate switch offer is only valid to 6 Oct.

The question is, if I do not receive an offer from Barclays by 6 Oct, should I abandon my Barclays application and accept the rate switch with my existing lender. I don't know if I can stomach the risk of the Barclays application not proceeding and then trying to secure a new offer. As of today HSBC's rate on the same product has gone up to 5.29%!

What would you do?

K_S

@moneysavingdummy If you're starting with the assumption that the Barclays offer might not come through (any particular reason you think that?) then it's a tough decision to make.

For a like-for-like remo, as a broker, I would expect the Barclays offer to come through and work on that basis, but I understand that you may not be as sanguine about that prospect.

MoneySavingDummy said:

Hi. I'm just wondering what other people would do in my situation. I currently have a mortgage of £215,000, which is in 2 parts; £100,000 fixed period ends 31 Dec 22 and £115,000 ends 30 Nov 23. I initially secured a rate switch with my current lender (HSBC) on part 1 at 3.78% for 5 years. With further consideration to increasing interest rates and not wanting to find myself in a situation next year where the mortgage becomes unaffordable, I decided it would be safer to pay the ERC on part 2 and fix both parts with another lender.

My broker submitted an application to Barclays on 14 Sep for a 7 year fix at 3.49%. My broker has not heard anything from Barclays since.

So I have 2 options open; My preferred being Barclays and the backup of the rate switch offer with my existing lender. The rate switch offer is only valid to 6 Oct.

The question is, if I do not receive an offer from Barclays by 6 Oct, should I abandon my Barclays application and accept the rate switch with my existing lender. I don't know if I can stomach the risk of the Barclays application not proceeding and then trying to secure a new offer. As of today HSBC's rate on the same product has gone up to 5.29%!

What would you do?

MoneySavingDummy

K_S said:

@moneysavingdummy If you're starting with the assumption that the Barclays offer might not come through (any particular reason you think that?) then it's a tough decision to make.

For a like-for-like remo, as a broker, I would expect the Barclays offer to come through and work on that basis, but I understand that you may not be as sanguine about that prospect.

I'm worried that Barclays might:

- Pull the product from those where they have not yet made an offer.
- Change their affordability criteria from what it was at the time of application.
- House prices fall and I find myself above 60% LTV (was at ~50% at time of application).

The markets are moving so quickly and with such volatility at the moment, who knows what further measures mortgage lenders might take and what level mortgage rates might be at should I need to apply again.

Then again, I may find the Barclays offer comes through without any issue in the next few days (fingers crossed).