Porting a mortgage - but keeping both houses

JimBoB_5

Hello gang, here's a question I can't find using the search button. My partner and I are very lucky in that we have two good incomes and we're pretty good at saving our money (in part thanks to this excellent site and freecycle). We're a couple years into our first mortgage and have managed to save up enough to (hopefully) remortgage in November with a reasonable LTV.

What I'd like to know is that if we get a 10yr fix and we save up enough to pay off the whole mortgage before the lock in period finishes. Would we be able to port the mortgage to a new place if we kept the old house? Essentially we would be moving house, just not selling the old one and renting it out. Does sound like it's possible?

opinions4u

If I undertstand rightly, what you want to do is to take out a 10 year fixed on your existing property, then buy a new house using the existing mortgage product.

Let's, for arguments sake, say both these properties are valued at £100k and your mortgage is for £75k.

To buy the new house you would need to raise £100k.

You would use £25k of this as deposit for your new house and port the mortgage across, using the other £75k of deposit to clear the debt on your existing property.

JimBoB_5

Yes that sounds about right - is it normal for mortgage lenders to allow this?

opinions4u

JimBoB wrote: »

Yes that sounds about right - is it normal for mortgage lenders to allow this?

Usually, although they are not obliged to offer you a mortgage on the new property, it will be fully underwritten at that stage.

Thrugelmir

JimBoB wrote: »

Hello gang, here's a question I can't find using the search button. My partner and I are very lucky in that we have two good incomes and we're pretty good at saving our money (in part thanks to this excellent site and freecycle). We're a couple years into our first mortgage and have managed to save up enough to (hopefully) remortgage in November with a reasonable LTV.

What I'd like to know is that if we get a 10yr fix and we save up enough to pay off the whole mortgage before the lock in period finishes. Would we be able to port the mortgage to a new place if we kept the old house? Essentially we would be moving house, just not selling the old one and renting it out. Does sound like it's possible?

Mortgage interest is offsetable against rental income for tax purposes. So what you are suggesting is not tax efficent. Mortgages are not ported as such as they normally are tied to a particular house. When moving one mortgage is discharged and another created. Allowing the lender to charge you fees!