Just had a call from HSBC

Adebisi

HSBC my mortgage and bank account provider called me today about changing my rate on the variable mortgage from 6.25 to 5.89. I now have 80k left on this mortgage (have only paid 4k off it over the last 3 years; it was a 100% mortgage and is over 30 years). They said I could change but I would have to change my current account to the bank account plus with a £12.50 charge per month. The saving from this would be about £8, is it worth it?

I do want to change but I am thinking that as I have only paid off a small amount of the mortgage then they will not offer me any of the new deals such as the rate matcher. I asked about changing the amount of years it was over from 30 to 15 but he said that overpaying would achieve the same thing and could be a better option for me.

Sorry if these seem stupid questions but I am a complete newbie idiot when it comes to mortgages.

Thanks in Advance
Tony

Sooler

How long does the .36% discount on the mortgage last? (.1% offer only applies to loans with a maximum loan to value of 90% on their website)

How long does the 45p discount on the monthly fee last? (£12.95 on their website)

What'sthe minmum contract? (minimum 12 month initial contract renewable monthly thereafter on their website.)

Adebisi

It's a variable tracker so it could move about and he said I would not be locked into any mortgage for any ammount of time. The £12.5 charge was for one year after that I would still be on the 5.89% (or what ever it went up/down to) but I could stop the charge/account plus.

cake21

Hi Tony, have you had a look at Martin's remortgaging guide? http://www.moneysavingexpert.com/mortgages/remortgage-guide

Also, from there "[FONT=Arial, Helvetica, sans-serif]Cutting 1% off a £100,000 mortgage will cut your costs by around £80 a month." [/FONT]it seems your £8/month saving is on the low side.

I'm sure someone much more knowledgeable will be along to help you soon, there's a whole load of calculators around (to show you how much you can save with overpayments, changes to interest rates, etc etc) but I can't find them at the moment...

(the rate matcher is only applicable if you were on a fixed rate mortgage before, HSBC rate matcher )

Overpaying would reduce your term and the interest paid - plus if you overpay instead you can always reduce the amount you pay if there is a crisis.

Good luck, and you're not alone!

owitemisermusa

HSBC's lifetime tracker mortgage is BOE+0.99%. The Plus account reduces this to BOE+0.89%.

Whether the £12.50 monthly fee justifies the saving of £8/month on the mortgage is purely dependent (IMHO) on whether the other aspects of the plus account are worth it.

I know they offer worldwide travel insurance, reduced overdraft rates and improved interest on your current account (for 1 year only!).

There are limits as well eg. 8% interest on the current a/c only up to £1000, 2.5% up to £2500 (you can get a lot more with the Alliance and Leicester acct) etc....

In short, it depends on whether you will use any of the benefits and if you cannot get better value for them elsewhere.

HTH.