Mortgage Dilema go with FD 5 year or HBSC rate matcher

missymouse

Please help. This is so difficult. Have applied for a FD fixed rate 5 year product at 5.29. Have not paid any money yet. meanwhile a new offer has come out with HBSC to match rate. We currently pay 4.89 with Northern Rock and it ends on 30.6.08.

i had a go on the mortgage calculator and it came out at 799 fee but i imagine there are other hidden extras to pay plus we will have to start again in 2 years'. Our mortgage only has 8 years to run so i really want to make a sensible decision.

i like the offset idea with FD. We do not have a large amount of disposable income but there is a regular amount coming into our accounts each month and we do overpay our mortgage each month. I worry that the rate will drop later in the year and we will be paying over the odds but then again the rates could go high because of inflation in a couple of years' and one can never rule out the late 80's/90's scenario.

Am i right with the HBSC that you can only overpay a small amount each month

some advice would be gratefully received as today i will probably pay the first fee with FD. I do not want to lose the deal or mess people about.

thanks in advance

whu

Hi - just to clarify - at what stage in the process are you with FD - when did you apply for the FD mortgage and have you received an application form from them?

luckyfool

missymouse wrote: »

Please help. This is so difficult. Have applied for a FD fixed rate 5 year product at 5.29. Have not paid any money yet. meanwhile a new offer has come out with HBSC to match rate. We currently pay 4.89 with Northern Rock and it ends on 30.6.08.

i had a go on the mortgage calculator and it came out at 799 fee but i imagine there are other hidden extras to pay plus we will have to start again in 2 years'. Our mortgage only has 8 years to run so i really want to make a sensible decision.

i like the offset idea with FD. We do not have a large amount of disposable income but there is a regular amount coming into our accounts each month and we do overpay our mortgage each month. I worry that the rate will drop later in the year and we will be paying over the odds but then again the rates could go high because of inflation in a couple of years' and one can never rule out the late 80's/90's scenario.

Am i right with the HBSC that you can only overpay a small amount each month

some advice would be gratefully received as today i will probably pay the first fee with FD. I do not want to lose the deal or mess people about.

thanks in advance

Have you already applied to FD or are you an existing customer? Reason being they have closed to new mortgage business from people who are not already customers. If you have already secured the deal, then I would personally stick with the FD product.

I believe HSBC allow you to overpay up to 20% of your monthly payment, which is relatively stingy.

missymouse

yes, i have applied and need to complete the paperwork. I am a FD customer and used to bank with HSBC as well.

I think my gut instinct is to go with FD but I appreciate your advice and comments

thanks

whu

it really depends on whether you think rates will go up or down in 2 years time (and I have no idea!!) and whether you can be bothered to go through looking for a mortgage again in 2 years time - i have applied for the FD 5 year and am waiting to hear - the one thing i would say is that from recollection i had 6 working days to decide on the FD mortgage and pay the initial fee from when i spoke to them so (unless it is different for a n existing customer) you should bare the timescale in mind - i was told that the total amount of fees would be £850 so you may want to check that also.
finally,you may wish to consider whether your overpayments would be more than 20% a month by using the offset mortgage as i dont think there is any limit on how much you can pay back.

Gailk

I know different people have different circumstances, but we've just remortgaged for 5 years fixed. Partly, I have to be honest so we don't have to have the stress of doing it again after 2 years..

luckyfool

whu wrote: »

finally,you may wish to consider whether your overpayments would be more than 20% a month by using the offset mortgage as i dont think there is any limit on how much you can pay back.

The 20% applies only to HSBC. On a First Direct offset product you can have any amount up to the mortgage balance in the linked savings account.

missymouse

yes i think i will go with FD. You are right that it is a pain to keep changing lender. I would have stayed with NR. It is such a pain.

rtw123

Hi Whu

Could you just clarify in relation to the fees on the FD mortage? I am looking at re-mortgaging with them (already bank with them) - just waiting for a call back. Can you advise total fees payable, I know there's a £299 arrangement fee and £299 offset fee. Can these be added to the mortgage?

Thanks

nathanhill69

£299 - (Mortgage Booking Fee) Payable upfront.
£99 - (Valuation Fee) Payable upfront.
£299 - (Arrangement Fee) Added to Mortgage.

If re-mortgaging in England then the £299 arrangement fee covers your legals.

rtw123

Great, thanks nathanhill69. I take it you have re-mortgaged with them? I can't see any other deals better than this on the market at the moment and their customer service is excellent (banked with them for about 9 years) so seems like a good deal and with the added security of 5 years with no worrying!!!