Porting Mortgage to Smaller Property

Yellabowley

Sorry I can't find any advice on this anywhere.

We have a 30 year mortgage with a 5 year fixed rate that we took out a year ago (4 years remaining). It was a £165,000 mortgage on a £185,000 house. A realistic sale price now is £175,000 and obviously we've made a years mortgage payments so paid off very little.

Due to current circumstances we are looking at downsizing considerably to a property that is worth £80,000 with the possibility of making some money through renovation but not immediately.

The mortgage is portable but is this in any way do-able? The current early repayment fees are approx £8000.

Many thanks.

VIGILANT22

speak to yr lender but .erc's should not apply..i would imagine any lender would be happy to reduce lending...

getmore4less

If you sell for £10k more than the mortgage, after costs you won't have enough for a deposit on the £80k place.

herbiesjp

Porting = like for like

So if you are reducing the mortgage by £80k odd, ERCs will apply, as you are not porting the same mortgage amount.

If your scheme allows for overpayments, then that may allow you to reduce your mortgage balance and subsequently the ERC slightly - but my guess is you will have that added cost to contend with also.

dwsjarcmcd

ERC's will apply but will be reduced in proportion to your new mortgage against your current loan. So if you reduce your mortgage by 50%. your ERC's will be reduced by 50%.

elly68

we are also looking to port when i spoke to mortgage adviser at halifax they said erc will be based on the amount we retained we are on a 95,000 mortgage but luckily for us house on market for 135,000 so we are going to be able to pay off most of our outstanding debt and meet deposit and hubby one of very few to get a better pay deal sometimes life does get better :T we are going in to see halifax wed will let you know what they say .my question is when they check credit report can they find out how much debt you have in total with other lenders or is it purely how good you are at paying,have a feeling that we are always way too honest when we meet with bank.also for those selling market seems to be holding we had 3 veiwers last week and now 2 booked for saturday hopefully someone will buy soon:D

elly68

she also said if not exchanging on same day that ercs would be charged ,but refunded if we took a mortgage in 3 months