2 year Discount Mortgage HSBC - Is this a good idea?

[Ivegotaheadache]

Looking to remortgage at the moment and have seen a 2 year discount mortgage with HSBC for 0.56% under the HSBC variable rate (which is currently 6.25).
The fees, as far as I can see, would be £475.

I'm a bit wary of taking out a tracker like mortgage, also it's discounted against HSBC's own variable rate which means it could go up and down regardless of what the base rate does.

The best fixed for us is the Halifax 3 years fixed at 6.39%, with fees of £699, though I will try and get that down as we're already with the Halifax.

This mortgage business really does give me a headache as it's so hard to know which would be the best to take.
I always think if I fix the base rate will drop right down, but if I go for the tracker it will shoot to about 20%!!!

Has anyone got (or is thinking about) the discount mortgage, or what have you fixed at?

First Direct are doing a fixed rate offset mortgage at 5.95% for 3 years with a fee of £598.

I don't think that you have to worry about the variable rate going up astronomically independent of the base rate - that is a pretty remote risk. But what does tend to happen is that base rate rises are reflected in the SVR pretty quickly whereas drops in the base rate take longer to filter through.

I just had a look, it does look good actually. Only thing is that offsetting wouldn't be much benefit as we don't have any savings and are usually somewhere in the red!
But I'm assuming that you could still take that mortgage out and just make the monthly payments on the capital and interest calculated on that capital.

Is this how the fixed offset works? That you pay the capital off at whatever they say it is, but the interest is calculated monthly depending on how much is in the account?

I'm a bit put off by the thought of having to change bank accounts and direct debits (but I suppose it would be worth it if it shaves a couple of years off your mortgage!)

If you are usually in the red then I would avoid FD tbh. From memory their bank charges are high. But you're right - you can run it as a normal mortgage.