Porting mortgage to lower value property

argyle02

Hi,

First time post!

I hope someone can help it seems an easy question but I can't get my head around it.

I'm considering selling my house and buying a cheaper one. HSBC say they will let me port my mortgage as it is a flexible product and is entirely fee free. I want to keep it as its 0.99% above base rate lifetime tracker, which is a great rate at the moment.

What I dont understand is what happens to my deposit etc.

Say for example my house sells for £140k, and I owe £110 on the mortgage, and want to buy a house for £90k.

The advisor at HSBC on the phone confused me by saying I would have to find an extra £20k myself to pay the diffeence between my current mortgage amount (£110k) and the new property (£90k). But then what has happened to the £30k equity I had? Does all that have to staright into the new property? If I keep the term time the same, will my monthly payments (capital repayment) stay the same or decrease?

My apologies if Ive not given the right info, please let me know.
Thanks in advance for your help

rsykes2000

What is the max LTV that HSBC will allow on the product you have ?
What might happen is that you sell your house and buy the new one on the same day. The equity you have in the current house goes towards the deposit on the new one (if the LTV allows this), lowering your mortgage so instead of having mortgage:equity of 110:140K, you will have 60:90K so your mortgage has reduced and therefore payments will go down.

argyle02

Hi,

Thanks for your reply!
I'm not sure what the max LTV was at the time - I think about 90%?
The problem I have is that I wanted to pay off some debts (about £10k) and was hoping that I could get a lump sum out to do this when I moved. Would this not be possible then?

Thanks again

argyle02

Would anyone else know what happens then? Am I better off losing the good mrotgage and rate to sell my house and get a new mortgage on cheaper house so I can pocket the differnece and pay off debts with it?

argyle02

Bump!!

Can anyone help at all?

Thanks in advance

jamesperrett

You are almost certainly better off keeping the mortgage if you can. The biggest stumbling block is going to be the loan to value - are HSBC going to be happy with 90%? If so, you will have an £81k mortgage which means that you need to fund £9k from your equity on the old house. This leaves you with £21k in your pocket.

I have conveniently ignored the expenses associated with moving here so you will also need to factor those into your calculations.

Cheers

James.

23rdspiral

i'd like to know this too. a friend is in a very similar position (wants to downsize, has fixed portable mortgage, fixed when rates were much higher) but HSBC has said 'no'. we dont understand.

she has taken into account moving costs ect.

if she downsized to a cheaper house surlely she'd be able to make the mortgage easier as it will be less each month, so the only thing we can think of is that they Want her to go bankrupt so they can have the house!!

argyle02

Spiral - I dont know to be honest

Is it possible she doesnt have a flexible mortgage product and is hence "tied in" until the ERC period or fixed period is over?
When I saw HSBC last they made the point that I could "port" my mortgage as it was a "flexible, fee-free product", so perhaps if its not one of those then they dont allow it?

23rdspiral

thanks for thinking, argyle

- sadly though it is a portable mortgage, she was sure to ask. it's odd. even my uncle couldnt explain it, which sorta rocked my world as he's really good with money and understanding the mysterious ways of banks!