How do I calculate the HSBC tracker vs fixed rate saving?

IAMIAM

HSBC Remortgage - want to move in around a couple of years....want to stay with same lender, they seem to always be the best with rates and exit fees anyway...

£185k : 30 Year Term commencing 1st July 

HSBC 2 Yr Tracker 4.49% £999
HSBC 2 Yr Fix        4.04% £999

I anticipate BOE rate to drop say in August, so tracker will be 4.24% and I further anticipate another by year end, so potentially a rate of 3.99% by December for at least another 18 months.

Is the tracker the way forward in my case if you were me?

Mark_d

I believe the fixed rate (4.04%) is set (indirectly) on the predicted interest rate drops.  So if things pan out as expected, the total interest you'd pay over the two years should be the same regardless of which mortgage you choose.
I would always choose the rate that is lowest at the time.  Going for the 4.04% fix you'll certainly be better off at the start of the term.  We can't be certain if/when the tracker would be at a lower rate than 4.04% or by how much.
In my view, the more difficult decision to make is make is how long you want the initial term to be - 2 years or 5 years.

Hoenir

IAMIAM said:

I anticipate BOE rate to drop say in August, so tracker will be 4.24% and I further anticipate another by year end, so potentially a rate of 3.99% by December for at least another 18 months.

Is the tracker the way forward in my case if you were me?

If you believe you can accurately forecast interest rates then yes. 

Hoenir

Mark_d said:

I would always choose the rate that is lowest at the time.  

The product fee needs to be factored in. Not just the monthly repayments to be considered but the amount owed at the end of the product's fixed term. 

IAMIAM

Interesting, thanks for all of this. My concern is HSBC have just increased all their rates, I am thankful I have stuck with the tracker....for now!