French apartment - re-mortgage or clear mortgage?

[Starbuck]

I bought an apartment on the Cote D'Azur 5 years ago. I rent it seasonally and it has worked well.

At the start of the banking crisis I decided to sell it. The immobilier reckoned I'd get 400K (Net) for it, I had paid 370K.
The outstanding mortgage was 250K.

It didn't move for ages, until about a month ago I was offerred 380K (Net).

Meantime I had a bit of a windfall. I'm now in the position to either sell it or clear the mortgage and keep it. I'm inclined to do the latter - prices held up well in the CDA, and seem to be picking up again. I'll keep renting.

Now the twist.
I've recently opened an account with HSBC down there. The guy I deal with is pretty switched on (for a French banker) and speaks perfect english.
He has offerred me the option to clear the mortgage (a tracker) then take out a tracker from HSBC for (say) 150K (not secured on the property).
His tracker rate is 1.68%.

The 150K is then placed in a HSBC savings/investment vehicle which (he says!) returns at least 3.75% per annum. I therefore pocket 2.07% interest, plus the rental income.

I'm a bit wary of this ("Your investment may Fall as well as rise etc etc") - but I'd like to bounce it off you guys before I decide.

Whaddya think?

 

[Macstuff]

Firstly well done on being in such a position. You need to be careful how you act here - as you said you have had a bit of luck and dont want to squander it.

The first thing I'd say to you is to get the French Bank to give you an offer for both the new mortgage and the rates associated with the savings vechicle in writing.
Honestly I'm suspicious of this deal - as the say, if something sounds too good to be true then it probably is. It could be that the rates that you have been offered are only promotional and may only last for a short period of time. It could also be that HSBC have a hefty arrangement fee for the new mortgage?

What is the rate you have on the current tracker? Is the new rate being offered by HSBC better?
Why not just take your windfall and deposit it in the savings / investment vechicle?

Be careful