Bank of Ireland / Post Office Mortgage Porting

ascaley

Me and my partner are looking to buy a new home, to do this we are going to need to get a mortgage of around £150k. I currently have a mortgage with Bank of Ireland that is £65k, which is fixed at 4.15% for another 3 years. Penalty to exit that mortgage is 5% (£3250!).

I can port that mortgage to the new property, but it seems the only way of getting additional lending is by getting a "Top Up" mortgage through Bank of Ireland, which offers a fix of 5.8% for 3 years, or 6% for 5 years! As we have 25% deposit these rates are not at all favourable.

Is it standard for lenders to do this? I asked about the porting process when I originally took out my mortgage, and was told I could do it no problem, but there was no mention it would be at there chosen rates. I assumed (I know!) that any additional borrowing would be at their rates for new customers.

Is there any way around this, or do I have to stump up the £3250, or pay 5.8% on the additional lending? Thanks for any help.

dimbo61

Well you have the choice but even with a 25% deposit you won't get a 3 year fix for less than 4.5% and the fees to move lender plus ERC and set up fee to get a 3 year fix may work out more expensive. can you overpay ? If so OP the more expensive part. I would also take a 3 year deal so both parts finish at the same time

Thrugelmir

ascaley wrote: »

Is it standard for lenders to do this? I asked about the porting process when I originally took out my mortgage, and was told I could do it no problem, but there was no mention it would be at there chosen rates. I assumed (I know!) that any additional borrowing would be at their rates for new customers.

The lender is allowing you to port your mortgage. The term port merely means transfer, which in this case is your existing mortgage.

Unless specifically written into the contract. There is no obligation for your lender to advance further monies at the same rate. So any new borrowing would automatically default to current rates.

You say the rates are unfavourable to you, but would should the BOI lend at a loss?

ascaley

Thrugelmir wrote: »

The lender is allowing you to port your mortgage. The term port merely means transfer, which in this case is your existing mortgage.

Unless specifically written into the contract. There is no obligation for your lender to advance further monies at the same rate. So any new borrowing would automatically default to current rates.

You say the rates are unfavourable to you, but would should the BOI lend at a loss?

Why would they be lending at a loss? I don't expect them to give me the same rate as my current mortgage, just the same rates as they offer to new customers on their website.