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

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

Original Poster

money.co.uk/mor…htm

Original Poster

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.

Original Poster

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

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

Original Poster

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.

Was just about to say...

Original Poster

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

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

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

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.

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 2014Mine 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 2014Original Poster

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!

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 2014Snap! . 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.