fixed or tracker?

hotcookie101

Hi, having been quoted 3 year fixed at 5.89% with (approx) £1100 fees from c&g from a broker at l&c I looked into some of the HSBC mortgages. With them it seems I can either get the 2 year fixed rate matcher at 4.79% with £1299, or a lifetime tracker at .48% above base rate(BOE) with 599 fees, both are included in mortgage transfer deal so therefore-no valuation/legal fees etc. So these are obviously a better deal than the broker advised (but HSBC are direct only so he couldnt offer me them, thats ok)
Just wondering if you think its better to go for the fixed or the tracker? I know its crystal ball time, so anyone who has theirs up and running I would appreciate it
Mortgage is for 23 years, for £115500, house value approx 180, was on 2 year fixed at 4.79%

dunstonh

So these are obviously a better deal than the broker advised (but HSBC are direct only so he couldnt offer me them, thats ok)

Are they better?

The HSBC is a 2 year deal but the C&G is three year. In a 6 year period you will have two deals with C&G but three with HSBC so will have an extra lot of fees. The fixed rate with HSBC is likely to be expiring when interest rates are higher than they are now so it may be a short term gain but a longer term loss.

I would like at 5 year fixes if the timescale isnt one you plan to move or redeem the mortgage in.

hotcookie101

ok, but if I looked at 3 year fixed with HSBC, fees are 499, with a rate of 5.77, or 5 year with a rate of 5.73, again with fees of only 499 or they have a 5 year fix at 5.39% with 999 fees, surely better than the C&G deal?
If they arent can you explain why-I find it all quite confusing

noodle

dunstonh wrote: »

I would like at 5 year fixes if the timescale isnt one you plan to move or redeem the mortgage in.

can i ask your reasons for suggesting that rates will be higher when a 2-yr hsbc deal ends?

my current deal ends in a few months. before the 'credit crunch' i was planning on fixing for 5 or 10 years. now that the rates have gone up, i'm thinking it would be better to go for something short and cheap... call it a 'splash and dash'... and look at the long term options next time around, when there's a good change that rates will be lower.

5.5% - 6% seems a high rate to fix at. or am i just being irrational because it's such a step up from the 4.4% that i have at the moment? i'm looking at a cashflow hit of between £100 and £150 a month (i'm also moving from a 30 year to a 25 year repayment period) and it seems like a lot (although i should add that it's entirely manageable).

dunstonh

can i ask your reasons for suggesting that rates will be higher when a 2-yr hsbc deal ends?

Crystal ball job but the rates are currently lower than they should be in attempts to get the credit moving again. In the meantime inflation is easing up and the BoE will look to bring that back down as soon as it can after the credit crunch has eased.

Dick_here

noodle wrote: »

before the 'credit crunch' i was planning on fixing for 5 or 10 years. now that the rates have gone up, i'm thinking it would be better to go for something short and cheap

The problem is that there isn't currently anything that you'd class as 'cheap' - not when compared to the rates that are now finishing at least.

noodle

dunstonh wrote: »

Crystal ball job but the rates are currently lower than they should be in attempts to get the credit moving again. In the meantime inflation is easing up and the BoE will look to bring that back down as soon as it can after the credit crunch has eased.

cheers. your logic makes good sense to me.

MortgageMamma

Hold on a second. Don't you have to pay your own legal fees for switching and also a valuation fee if you take a remortgage with HSBC? Like your broker I don't sell HSBC mortgages BUT I am sure they do not offer free legals and a free val like C&G do. Make sure you do the maths properly, C&G may well be more competitive for you.

snarffie

MortgageMamma wrote: »

Hold on a second. Don't you have to pay your own legal fees for switching and also a valuation fee if you take a remortgage with HSBC? Like your broker I don't sell HSBC mortgages BUT I am sure they do not offer free legals and a free val like C&G do. Make sure you do the maths properly, C&G may well be more competitive for you.

Legals and valuation are free with HSBC, at least with their tracker. They did a druve-by valuation apparently. Is there any way I can find out how much they valued my house at?

hotcookie101

HSBC do a free mortgage transfer deal-so no legal or valuation fees.
so more competitive than C&G

TwelfthMan

snarffie wrote: »

Legals and valuation are free with HSBC, at least with their tracker. They did a druve-by valuation apparently. Is there any way I can find out how much they valued my house at?

A quick phone call to the branch should answer your question. Failing that, the valuation will be listed in your mortgage offer.