Just in best mortgage rate ever! HSBC new 2 year discount rate 0.99%
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Just in best mortgage rate ever! HSBC new 2 year discount rate 0.99%

£1,999HSBC Deals
25
Found 22nd Oct 2014
This deal will go hot hot hot!!

0.99% discount special for 2 years on a maximum 60% LTV mortgage!!!

Comes with a very high £1999 fee. Will come handy to those with large mortgages

25 Comments

With a £2k fee I wonder what the minimum value of the mortgage is before you break even over those 2 years?

It's not a fixed rate. It's a discount rate based on HSBC variable rate. A Low rate but no guarantees that variable rate will stay as is even if base rate unchanged as I imagine the rate is set by HSBC rather than being linked to base rate.

Original Poster

It's not a fixed rate but a variable one a discount of 2.95% off their standard variable 3.94%. Should go up when base rate goes up in the foreseeable future.

Shengis

With a £2k fee I wonder what the minimum value of the mortgage is before … With a £2k fee I wonder what the minimum value of the mortgage is before you break even over those 2 years?



Depends on your term and borrowing amount. I'd hazard a guess that you'd need at least 20 years and £250k to be worth it against say a £500 or £1k fee. Obviously you'll need to work it out on each scenario to see if it is the best option.

That is pretty epic!

Original Poster

Shengis

With a £2k fee I wonder what the minimum value of the mortgage is before … With a £2k fee I wonder what the minimum value of the mortgage is before you break even over those 2 years?



Paying 3% on a 200k mortgage accrues interest approx 6k a year. Now if you pay a third of it in a year with 2k product fee you are already better off in the first year by 2k.

And you'll break even if your interest rate goes down from 2% to 1% on a 200k mortgage in the first year.

Original Poster

kizza77

Paying 3% on a 200k mortgage accrues interest approx 6k a year. Now if … Paying 3% on a 200k mortgage accrues interest approx 6k a year. Now if you pay a third of it in a year with 2k product fee you are already better off in the first year by 2k.And you'll break even if your interest rate goes down from 2% to 1% on a 200k mortgage in the first year.



Of course this is an oversimplification interest is calculated daily. All approximate!

Original Poster

I guess peeps are put off by the £1999 fee. But hey ho! For every 0.5% decrease in interest on a 100k mortgage, one is making a saving of £500 a year,
200k mortgage 1k saving a year
300k mortgage 1.5k saving a year
400k mortgage 2k saving a year
500k mortgage 2.5k saving a year

Hope the above justifies the £1999 for some.

That's why a 3% halifax mortgage gathers over 1500 heat and the 0.99% HSBC has gone cold.

I think you jinxed it with "This deal will go hot hot hot!!" :-p

Bigfootpete

I think you jinxed it with "This deal will go hot hot hot!!" :-p



Was just about to say...

If you can work out the overall 2 year cost compared to the 3% deal it might help.

£2000 fee.... jesus. That's like car dealers who offer interest free finance but their cars are all overpriced.

Original Poster

I rise to the challenge of Bigfootpete!

Take for example a 100k mortgage comparing a product fee free 3% mortgage and 1% £1999 fee mortgage.

Over the 2 year period, one is saving 2k taking into account the £1999 fee( £2k saving in interest offset by £2k product fee in the 1st year, then 2 k saving in the second year)

My calculations says on a
100k mortgage you are saving 2k
200k mortgage you are saving 6k
300k mortgage you are saving 10k
400k mortgage you are saving 14k
500k mortgage you are saving 18k!!!
In interest payment!!!!!!!

Absolutely bonkers!!!

Other than if you have shares in your bank building society and would like to get dividends, I cannot understand why you would forego such amazing savings!

Original Poster

Ross81

£2000 fee.... jesus. That's like car dealers who offer interest free … £2000 fee.... jesus. That's like car dealers who offer interest free finance but their cars are all overpriced.


18k savings on a 500k mortgage can get you a nice new car off the showroom new plate 66 in 2 years time!!!

kizza77 the biggest problem with your 'calculation' is that your forgetting to show that as this isn't a fixed rate, if HSBC decide to raise their Standard Variable Rate (SVR) like Santander did, then this mortgage rate will increase. It doesn't take a base rate shift for lenders to review their static costs and increase their SVR.
The other factor in the mortgage offer, as you've alluded to, is that it's requires both a large mortgage and a fair chunk of equity available in the property. Tend to find people vote on deals based on if they will benefit from it hence the low temperature in here.

Original Poster

ireallyambob

kizza77 the biggest problem with your 'calculation' is that your … kizza77 the biggest problem with your 'calculation' is that your forgetting to show that as this isn't a fixed rate, if HSBC decide to raise their Standard Variable Rate (SVR) like Santander did, then this mortgage rate will increase. It doesn't take a base rate shift for lenders to review their static costs and increase their SVR.The other factor in the mortgage offer, as you've alluded to, is that it's requires both a large mortgage and a fair chunk of equity available in the property. Tend to find people vote on deals based on if they will benefit from it hence the low temperature in here.


True my friend! Indeed so let us abandon this deal. Definitely not worth a gamble. I am off to buy couple of lotto tickets and euromillions ticket for Friday! It has to be won the 150million! Good luck!

Should ban fees like this. Bloody minefield.

kizza77

True my friend! Indeed so let us abandon this deal. Definitely not worth … True my friend! Indeed so let us abandon this deal. Definitely not worth a gamble. I am off to buy couple of lotto tickets and euromillions ticket for Friday! It has to be won the 150million! Good luck!


That might be a good call! Got to agree with you that for people who meet the criteria on this mortgage it's more than worth the £2k entry fee. Hopefully those people will see this offer.

kizza77

I guess peeps are put off by the £1999 fee. But hey ho! For every 0.5% … I guess peeps are put off by the £1999 fee. But hey ho! For every 0.5% decrease in interest on a 100k mortgage, one is making a saving of £500 a year, 200k mortgage 1k saving a year300k mortgage 1.5k saving a year400k mortgage 2k saving a year500k mortgage 2.5k saving a yearHope the above justifies the £1999 for some. That's why a 3% halifax mortgage gathers over 1500 heat and the 0.99% HSBC has gone cold.



Yes, I'm sure the Fee is causing the problem. If it was a longer period and/or fixed I think it would be still be popular though.

The difference between the Halifax rate and this is 2.00%, so a saving of £2,000 (basically the amount of the fee) on a £100,000 mortgage in the first year, and then IF the Standard variable rate hasn't increased by then a saving of £2,000 the second year BUT interest rates are expected to increase next summer so this deal is a gamble and the Halifax deal does seem to be a safer bet to me.

Incidentally is there no fee payable under the Halifax deal?
Edited by: "colin1961" 22nd Oct 2014

Best rate ever?? Nah!
Mine is set at 0.19% above Bank Base. Started out at 4.69%, rose to 5.19%, but has been at 0.69% for a few years as there's no "collar"/lower qualifying base rate. And no fee. Oh how I wish we'd taken out a much bigger re-mortgage loan at the time!!

But, in the past we'd fixed at 12.5% over 2 years (late 80's and a fantastic deal at the time!) after having hit 15.95% variable, and again at 10.7% for 5yrs. (the 90's), so swings and roundabouts!!

PS - not voting either way, as it might be a good deal for some people

Edited by: "sjs31" 22nd Oct 2014

Original Poster

I know but life is a gamble. Just like one if you has mentioned they were on the tracker mortgage.

IMHO I don't think an interest hike will happen next year. There is a climate of deflation.. Forecast are bleak. Legend why all banks have slashed their rate in unison? Weaker property market? Future holds no interest hike? To trap customers? Speculations.... We can only speculate.... Too complex even for me.

Btw I just assumed the halifax deal was fee free. I don't even care about it. Barclays and Tesco are offering 5 year fixed rate at 3% for a fee.

Best of luck!

I'm in a BOE base rate +0.19% for life tracker with the Woolwich. Currently 0.69% interest rate, best i've ever seen. Nominal set up fees (£99 if I remember rightly). The mortgage is 6 years old right now, so no chance anyone new getting it.

That HSBC fee is too high, they've got ample security on the loan with a maximum 60% LTV, £2k fees is plain greedy.
Edited by: "monkeyhanger75" 22nd Oct 2014

monkeyhanger75

I'm in a BOE base rate +0.19% for life tracker with the Woolwich. … I'm in a BOE base rate +0.19% for life tracker with the Woolwich. Currently 0.69% interest rate, best i've ever seen. Nominal set up fees (£99 if I remember rightly). The mortgage is 6 years old right now, so no chance anyone new getting it.



Snap! . But no fee as it was a remortgage.

My brother is sooo pleased I suggested he consider it, rather than the 10yr fixed rate @ 5% (?) mortgage, + arrangement fee, that he was going to take.

Pay that £2000 off your mortgage and get another decent rate. How much would that £2000 one off payment save over 25 years?
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