HSBC 4.47% Tracker vs 4.40 Fixed 2 Year 75% LTV

IAMIAM

Am I right in thinking I could take the fix and then secure a rate switch in 18 months time? Or is it better to take the tracker and rate switch to fix as an existing customer asap when time right....Balance going to be 173k

Completing 1st June

Emmia

IAMIAM said:

Am I right in thinking I could take the fix and then secure a rate switch in 18 months time? Or is it better to take the tracker and rate switch to fix as an existing customer asap when time right....Balance going to be 173k

Completing 1st June

You can take the fix, and then when that expires you can switch to another fix, or you'll move to the standard variable rate, whatever that might be then.

IAMIAM

I presume this tracker is going to become 4.72% in a few weeks too

Emmia

IAMIAM said:

I presume this tracker is going to become 4.72% in a few weeks too

That's up to the bank...

gih

One factor to consider is fees: do any of these products (the 4.4% fix, the tracker currently on 4.47%, and the new fix you'd switch to as an existing customer) come with a £999 fee?  Looking at the HSBC website, it looks like at least the tracker would have a £999 fee (assuming you're a home mover or first time buyer).

If you're paying £999 for the tracker, then paying another £999 shortly after for the new fixed rate product you're switching to, I'd guess this strategy doesn't work (unless the new product has a very low fixed rate). Even if only the tracker has a £999 fee, I'd imagine this strategy doesn't work out.  I'm taking this tracker-then-switch approach with Nationwide, but with fee free products... it doesn't work out if I go for the products with fees (will need to switch asap though, as the fee-free tracker rate is high, but it still works out).

For the 2 year 4.4% fix, I assume you can switch 6 months before the end of the fixed rate deal, as you mention switching after 18 months.  Looking at the HSBC website, it looks like their fixed rate products have fixed "end dates" (rather than being fixed for exactly 24 months), so a 2 year deal may be a few months more or a few months less than 2 years.  So depending on what the end date of the 4.40% product is, it might not be an 18 month wait before you can switch, e.g. it might be a 16 month wait if your 2 year fix is actually 22 months, or it might be a 20 month wait if your 2 year fix is actually 26 months.

If I was you, and assuming you can phone up HSBC and update your choice of product up to completion, I'd go for the 2 year 4.4% fix at the minute.  Then in the remaining time before completion, keep an eye on the news to see if the tracker becomes an attractive option in its own right (e.g. if the BoE rate is expected to drop over the summer), and so if you take the tracker, you take it intending to stick with it for the "2 years" rather than to switch from it asap.

Emmia

With HSBC you get a notification a few months (2-3) before the fix expires and you can do another fix then.

If you don't fix again you just move onto the standard variable rate

IAMIAM

I think I may just stick with this tracker and ride out 12-18 months....see what happens...

JMA74

All HSBC fixed rates increasing from Wednesday 1st March. They dont release the rates ahead of time

Nailer99

JMA74 said:

All HSBC fixed rates increasing from Wednesday 1st March. They dont release the rates ahead of time

Interesting. Thank you. 

IAMIAM

Oh really...wonder why....they have only just reduced them all!

lmitchell

IAMIAM said:

Oh really...wonder why....they have only just reduced them all!

Worryingly, the SONIA swap rates for five-year fixeds have risen considerably in the last week.

It's up from 3.50% to around 4%. There is a general sense that interest rates may be staying at 4% longer than expected. I think food inflation will have an enormous role to play in the UK interest rate in the next few years.