They have now introduced a similar product for those with 5% more equity, i.e. 65% LTV, at 2.64%. Those that go for this product will not see an increase in the interest charged until January 2027.
You should only choose this product if you are certain that you are in your 'forever home' because early repayment charges are high.
I'm pretty sure this is the cheapest ever 10-year fixed rate fee-free mortgage. It even beats Coventrys 2.69% (which is only available at 50% LTV)
Top comments
marathonic
16 Sep 1610#12
The reason a 10 year fix is so low now is because they've factored in the high likelihood of further drops in Bank of England base rate. However, how much are they going to go down? Probably a 0.15% drop to 0.1%. In the grand scheme of things, interest rate drops from a base of 0.25% is going to be negligible.
I'm not disagreeing that a 10 year fix MAY work out more expensive than a tracker - and, indeed, I'm sticking with my 1.54% lifetime tracker for now. However, a 10 year fix at 2.64% is never going to work out the abysmal decision that a 10 year fix worked out in the past. For example, in 2007 when Bank of Ireland base rate was 5.75%, 10-year fixes cost well over 6%. Someone with such a fix is now paying a premium of close to 5% over current short term products. However, someone taking this fix at 2.64% is likely only ever going to pay a maximum premium of about 1% over short term products.
For a lot of people, the risk that they'll be paying 1% extra per year over 10 years is much more palateable than the risk that they'll be paying an extra 4% per year in the latter part of the next 10 years.
delusion
16 Sep 166#2
I know a lot of people that have been stung by the early repayment charge on long term deals. Doesn't take much for your situation to change requiring a house sale or remortgage to take out equity.
Given current base rate id stick to a short term deal personally. With a 65% LTV you should be able to find a rate under 1.5 pretty easily. I just signed up to one at 1.14% 2 year with 60% LTV, plus getting 1% of payments back as cashback
lanc1979
16 Sep 163#36
There remains a tipping point though, where it is worth paying a fee. Quick maths on your 0.99% with fee of 1499, says you must have a mortgage of greater than 120,000 to see the benefit of paying a fee. Anything less, and a fee free mortgage at current rates (2.5% ish) is better value.
For anything over 120,000 that's a good deal though.
heathergreen1
16 Sep 163#32
Fairly good indication of the long term outlook if banks are offering rates as low as 2.64% fixed for 10 years!
All comments (63)
dannyb182
16 Sep 16#1
very good deal if you are in the right situation!!! unfortunately i dont quite have enough equity in my house :-(
steph350 to dannyb182
16 Sep 16#26
I prefer to buy on Cash than paying all equity of your house to Bank... :smiley:
delusion
16 Sep 166#2
I know a lot of people that have been stung by the early repayment charge on long term deals. Doesn't take much for your situation to change requiring a house sale or remortgage to take out equity.
Given current base rate id stick to a short term deal personally. With a 65% LTV you should be able to find a rate under 1.5 pretty easily. I just signed up to one at 1.14% 2 year with 60% LTV, plus getting 1% of payments back as cashback
dbailey10 to delusion
16 Sep 16#3
With what fee?
Franken to delusion
16 Sep 16#5
Agreed. HSBC doing a 2yr 0.99% 65% LTV at the mo. 1499 fee but you'll make that back plus loads more in interest savings over the course of the 24 months compared to this 10 year. I'm hoping this will still be around when my current 1.99% deal runs out next July.
Edit: It looks like they've added "to existing HSBC mortgage owners only" to the offer now.
benjai to delusion
16 Sep 16#18
I'm just in the process of remortgaging with Santander. What's this 1% cashback you mention? You get 1% back of what, your mortgage payments? I don't see this being mentioned in my terms so I'll have to check with my broker. Presumably you have to be a current account holder with them as well? Thanks
delusion
16 Sep 161#4
It's a £995 fee I think with santander (which can be added to the loan amount if preferred without an affect on your affordability/loan offered), but unless you are only borrowing a small amount it's much cheaper than the additional interest you would pay.
There is zero early repayment charge at any point with the santander mortgage, with this hsbc one you will pay thousands for every 100k borrowed if you need to change product.
Not suggesting this isn't a good deal for some, but just be aware of what else is possible
firstofficer
16 Sep 16#6
Please note that this is not for new customers..
I'll get my coat..
marathonic to firstofficer
16 Sep 16#8
The 75% LTV product, at 2.99%, is marked 'Existing HSBC Mortgage Holders Only'. The 65% LTV product isn't marked as such. It also comes up when you search under "Buy my first property". How could someone buying their first property not be a new customer?
marathonic to firstofficer
16 Sep 16#14
The 10 year fixed rate at 75% is marked "Existing HSBC Mortgage Holders Only" - so only available to current mortgage customers. It's a different product to that for those that hold a HSBC Advance Current Account.
This 10 year fixed rate at 65% is not noted as having any restrictions - neither current mortgage holders nor current current account holders.
simont_space
16 Sep 16#7
Be aware that the mortgage calculator on the HSBC web site gives incorrect figures.
I have contacted them through various methods and got the stock reply of yes we know. No timescale to correct it. All suggested applying for a Decision in Principle to see what you could borrow, a bit risky as each application goes on your credit file and reduces your chances of getting a mortgage.
It states up to 6.6x annual income rather than the maximum they will lend of 4.75x, and that is only to 15% of monthly customers.
justinlinham to simont_space
16 Sep 16#40
A decision in principle is a soft search and leaves no record on your credit file
paypeanuts
16 Sep 163#9
I've regretted every long-term fix I've ever taken out as they've never worked out cheaper than, say, a base rate tracker. Avoid them, kids.
marathonic to paypeanuts
16 Sep 163#10
most long term fixes in the recent past have been taken out at times where the Base rate has subsequently fallen significantly. we're at 0.25% now so there isn't much further to go.
fr3dy77_sp33d to paypeanuts
21 Dec 16#63
I guess your regrets will be over soon as the swap rates increased and mortgage rates at increasing across the board now
koolishy67
16 Sep 16#11
only tracker
marathonic
16 Sep 1610#12
The reason a 10 year fix is so low now is because they've factored in the high likelihood of further drops in Bank of England base rate. However, how much are they going to go down? Probably a 0.15% drop to 0.1%. In the grand scheme of things, interest rate drops from a base of 0.25% is going to be negligible.
I'm not disagreeing that a 10 year fix MAY work out more expensive than a tracker - and, indeed, I'm sticking with my 1.54% lifetime tracker for now. However, a 10 year fix at 2.64% is never going to work out the abysmal decision that a 10 year fix worked out in the past. For example, in 2007 when Bank of Ireland base rate was 5.75%, 10-year fixes cost well over 6%. Someone with such a fix is now paying a premium of close to 5% over current short term products. However, someone taking this fix at 2.64% is likely only ever going to pay a maximum premium of about 1% over short term products.
For a lot of people, the risk that they'll be paying 1% extra per year over 10 years is much more palateable than the risk that they'll be paying an extra 4% per year in the latter part of the next 10 years.
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Opening post
http://www.hotukdeals.com/deals/10-year-fixed-rate-mortgage-2-79-max-ltv-70-0-booking-fee-hsbc-2476124
They have now introduced a similar product for those with 5% more equity, i.e. 65% LTV, at 2.64%. Those that go for this product will not see an increase in the interest charged until January 2027.
You should only choose this product if you are certain that you are in your 'forever home' because early repayment charges are high.
I'm pretty sure this is the cheapest ever 10-year fixed rate fee-free mortgage. It even beats Coventrys 2.69% (which is only available at 50% LTV)
Top comments
I'm not disagreeing that a 10 year fix MAY work out more expensive than a tracker - and, indeed, I'm sticking with my 1.54% lifetime tracker for now. However, a 10 year fix at 2.64% is never going to work out the abysmal decision that a 10 year fix worked out in the past. For example, in 2007 when Bank of Ireland base rate was 5.75%, 10-year fixes cost well over 6%. Someone with such a fix is now paying a premium of close to 5% over current short term products. However, someone taking this fix at 2.64% is likely only ever going to pay a maximum premium of about 1% over short term products.
For a lot of people, the risk that they'll be paying 1% extra per year over 10 years is much more palateable than the risk that they'll be paying an extra 4% per year in the latter part of the next 10 years.
Given current base rate id stick to a short term deal personally. With a 65% LTV you should be able to find a rate under 1.5 pretty easily. I just signed up to one at 1.14% 2 year with 60% LTV, plus getting 1% of payments back as cashback
For anything over 120,000 that's a good deal though.
All comments (63)
Given current base rate id stick to a short term deal personally. With a 65% LTV you should be able to find a rate under 1.5 pretty easily. I just signed up to one at 1.14% 2 year with 60% LTV, plus getting 1% of payments back as cashback
Edit: It looks like they've added "to existing HSBC mortgage owners only" to the offer now.
There is zero early repayment charge at any point with the santander mortgage, with this hsbc one you will pay thousands for every 100k borrowed if you need to change product.
Not suggesting this isn't a good deal for some, but just be aware of what else is possible
I'll get my coat..
This 10 year fixed rate at 65% is not noted as having any restrictions - neither current mortgage holders nor current current account holders.
I have contacted them through various methods and got the stock reply of yes we know. No timescale to correct it. All suggested applying for a Decision in Principle to see what you could borrow, a bit risky as each application goes on your credit file and reduces your chances of getting a mortgage.
It states up to 6.6x annual income rather than the maximum they will lend of 4.75x, and that is only to 15% of monthly customers.
I'm not disagreeing that a 10 year fix MAY work out more expensive than a tracker - and, indeed, I'm sticking with my 1.54% lifetime tracker for now. However, a 10 year fix at 2.64% is never going to work out the abysmal decision that a 10 year fix worked out in the past. For example, in 2007 when Bank of Ireland base rate was 5.75%, 10-year fixes cost well over 6%. Someone with such a fix is now paying a premium of close to 5% over current short term products. However, someone taking this fix at 2.64% is likely only ever going to pay a maximum premium of about 1% over short term products.
For a lot of people, the risk that they'll be paying 1% extra per year over 10 years is much more palateable than the risk that they'll be paying an extra 4% per year in the latter part of the next 10 years.