What happens to your mortgage when you upsize?

[filu63]

@someone12 Porting means moving your existing mortgage to a new property, not necessarily borrowing more.

Yes, with a 'second charge mortgage' if there's a problem the second lender can only get repaid after the first lender does. They're usually more expensive to account for this.

I think ERCs are usually pretty standard, not something you can negotiate. They typically reduce as you come towards the end of your fix. Tracker mortgages don't have an early repayment charge but of course you risk interest rate fluctuations.

I don't think it's a problem to have two loans though, so I wouldn't stress it personally, just do whatever comes out cheaper (keeping two loans going, paying the SVR on one mortgage until both mortgages are available to remortgage without an ERC, paying the ERC to get a single loan).

 

[soldierofgod22]

@someone12 You’ve pretty much hit the two options.

You can port your existing mortgage over with your current lender, you would also need to top up the mortgage by borrowing more too on new terms.

The other option is to ditch the current lender and pay off any early redemption fee and enter in to a new mortgage with new terms with a new lender.

Given recent rate increases you may be best to look at porting your existing deal and topping up. But certainly worth ‘crunching’ the numbers.

 

[bahamianbeauty]

@soldierofgod22 Lender doesn't have to approve a porting of the mortgage though.

First port of call is to check mortgage t&c or talk to the provider.

 

[soldierofgod22]

@bahamianbeauty True, but circumstances would have to be odd and may limit other lenders lending to for the lender to prevent a port.

 

[rogersdr01]

@bahamianbeauty You sure? We had to go through all the checks with Nationwide and ended up paying £14k ERC to move

 

[bahamianbeauty]

@rogersdr01 Yeah so you didn't port your mortgage then. Nationwide are great so good choice there.

 

[someone12]

@soldierofgod22 I’m remortgaging in the summer. So unfortunately my low rate is gone. But if I’m in a position to upsize then, that might be the perfect timing. Go on variable for 2/3 months while I sell and buy a new place.

 

[resjudicata]

@someone12 As far I’m aware (as it’s what we had to do), depending on how long you have left on your existing fix (to avoid ERC), you transfer your old mortgage to the new property and then take out a second mortgage (with any supplier you choose) to make up the difference.

You should aim to take a second mortgage which ends at a similar time as your original fix so that you can then remortgage for the full amount the next time around. This may or may not mean a short period on SVR if you can’t get the mortgages to align exactly.

 

[filu63]

@resjudicata I don't think the 'any supplier you choose' bit is correct - think it generally has to be the same lender. Do you have two different ones?

 

[harrisonm7]

@someone12 Either get a brand new mortgage for the full amount which will pay off your current mortgage, but means you pay an early repayment charge if you're in a fixed period.

Or you wait until the fixed period ends then when you're on a variable rate you can move to a brand new mortgage without paying fees.

Or if you're in your fixed period you can just port your existing mortgage. This means you stay with your lender and end up with 2 parts to the mortgage. The original stays the same (e.g. you keep the interest rate) and you then get a "top up" mortgage for the rest, which will be on a different interest rate. I've ported several times and it's been fine.

 

[someone12]

A few of you have brought up the problem of multiple loans having different expiration dates. That seems like a mess to manage. My next house will likely be the largest I’ll ever buy so I don’t really plan on upsizing further but I guess some people may have 3 or 4 separate loans if they upsize multiple times.

From what I read, the only way to realign is to pick a fixed that doesn’t end too far from the other and then go on variable for the remaining. Seems like it could be pretty costly; eg if you have a 5y ending in 3.5y, you can either take a 2y or 5y on the second loan but then have to ride 1.5y on a variable? That’s got to cost a fortune, no?

 

[peaceron]

@someone12 Why is having 2 renewal dates an issue?

We have 2 loans (one new, one ported) month to month you never notice it and having renewed once already, it really wasn't complicated or difficult to navigate