Porting a mortgage?
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luis1988
Posts: 117 Forumite
Hi, hoping someone can give some advice...
We are just about 1 year into a Santander 2.5 year fixed mortgage and we also used H2B.
Our circumstances have changed somewhat in the last year and by the summer my partner and I will be earning roughly £85,000 between us, where as when we obtained our mortgage we was earning roughly £50,000 between us.
As such, to get on the ladder we moved to a location quite far from friends and family and really want to get closer back to London as my partner is now working there. We would really like to move early next year, obviously before our fixed rate is finished. Prices in our area already reflect a good rise from what we paid so we are confident we can sell the house for a good price in order to pay off H2B as well and to leave us with a decent deposit for the next house.
Some questions we have... If we port the mortgage, I assume we can apply for a new mortgage to meet the difference? Would this have to be with Santander? Would this incur any early fees? How does it work with the amount we'd have for the deposit, I assume it would be the sale price minus paying back 20% to H2B minus what's left on the mortgage?
Thanks in advance!
We are just about 1 year into a Santander 2.5 year fixed mortgage and we also used H2B.
Our circumstances have changed somewhat in the last year and by the summer my partner and I will be earning roughly £85,000 between us, where as when we obtained our mortgage we was earning roughly £50,000 between us.
As such, to get on the ladder we moved to a location quite far from friends and family and really want to get closer back to London as my partner is now working there. We would really like to move early next year, obviously before our fixed rate is finished. Prices in our area already reflect a good rise from what we paid so we are confident we can sell the house for a good price in order to pay off H2B as well and to leave us with a decent deposit for the next house.
Some questions we have... If we port the mortgage, I assume we can apply for a new mortgage to meet the difference? Would this have to be with Santander? Would this incur any early fees? How does it work with the amount we'd have for the deposit, I assume it would be the sale price minus paying back 20% to H2B minus what's left on the mortgage?
Thanks in advance!
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Comments
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You can't transfer a mortgage from one property to another.
If you qualify for a new mortgage with the current lender, you apply for the amount you need and the rate from your current mortgage is ported to the new one on completion day. Any increase in your borrowing is offered on one of the lender's current products.
This would enable you to see out the rate and avoid ERCs. Please check with your lender they will permit the port of a HTB product if your next property will be non-HTB.
Your "deposit" for the next property is the sale price of your current home minus the HTB loan (20% of value of property, not necessarily sale price) minus existing outstanding mortgage.
See here for HTB redemption process;-
http://www.myfirsthome.org.uk/I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thanks for the reply, the link was really helpful too. I need to call Santander to see what is available.
Can I just pick your brain quickly on some calculations I did if we moved?
So if we sell our current property for £350,000:
£209,000 mortgage to port across
£70,000 to pay back to H2B
£71,000 left over - fees, surveyors etc. remove another £10,000 so left with roughly £60,000
If we then use £40,000 of that as deposit for the next house:
Second home £400,000
Mortgage ported £209,000
Deposit of £40,000
Mortgage left to find £151,000
Would the LTV of the new mortgage be based only on those figures? So in fact would be 79%?
That would mean we could get a rate from a mortgage advisor for a new 2 year fix from Santander of 1.59% as LTV is under 85%?
Sorry if confusing!0 -
£40k deposit on £400k property is 10% not 21%.0
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So the deposit would be against the whole mortgage rather than just the new mortgage we would be applying for?0
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Damn thought I had got something wrong ha! Okay one more question, if I port my mortgage, would I be able to get the new mortgage from a new lender or would it have to be with Santander do you think?0
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You aren't porting the mortgage, you are porting the rate.
On the day your sale completes, your old mortgage is gone, repaid.
Porting means you are porting a Santander rate, so you can only port that to a new Santander mortgage.
£400,000 purchase
£40,000 deposit
_______
£360,000 Santander mortgage of which
£209,000 is on old Santander rate
£151,000 is on new Santander rate,
but you have to qualify for the whole new mortgage - affordability, credit status, valuation the lot. Just like any new mortgage application.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Damn thought I had got something wrong ha! Okay one more question, if I port my mortgage, would I be able to get the new mortgage from a new lender or would it have to be with Santander do you think?
You don't seem to understand.
You cannot port a mortgage.
You pay off the old mortgage in full and apply for a brand new one for the full amount on the new property.
The lender then ports the rate on your old mortgage to the same amount of your new mortgage.0 -
kingstreet wrote: »You aren't porting the mortgage, you are porting the rate.
On the day your sale completes, your old mortgage is gone, repaid.
Porting means you are porting a Santander rate, so you can only port that to a new Santander mortgage.
£400,000 purchase
£40,000 deposit
_______
£360,000 Santander mortgage of which
£209,000 is on old Santander rate
£151,000 is on new Santander rate,
but you have to qualify for the whole new mortgage - affordability, credit status, valuation the lot. Just like any new mortgage application.You don't seem to understand.
You cannot port a mortgage.
You pay off the old mortgage in full and apply for a brand new one for the full amount on the new property.
The lender then ports the rate on your old mortgage to the same amount of your new mortgage.
Thanks both, sorry I was ignoring the way in which it works but I understand now! Always great advice on these forums so really appreciate it!0
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