Change in circumstances on fixed term mortgages

IvoryJ

Hi there, sorry if this sounds naive but can anyone tell me what is the likely outcome in this scenario:

I have a fixed rate mortgage deal. During the fixed rate period, I decide I want to sell my property and buy a new one with a partner.

Are mortgages portable enough to cope with a new property and a new ownership arrangement (and possibly a new LTV) or would I have to get out of the fixed term (or wait for it to end) before I could buy the new property?

Thanks for any advice you can provide!

sonastin

I can't comment on the portability of your existing arrangements - all lenders have their own requirements so it is hard to say how flexible they would be.

But in terms of getting out of your current deal, you can always leave it early but you'll have to pay a charge. One of the things you should do is find out what the charge is at the moment. Sometimes it is worth taking the hit and paying that charge if you can get a better deal elsewhere so to make an informed decision you need all the facts. The closer you are to the end of the deal, the lower the ERC charge should be, although that's not always the case. If you're near the end and its a high figure, waiting it out might be your best bet.

westv

When I had a mortgage with Nationwide it was fully portable with no charge for transferring to a new property.

hazyjo

If fixed rates are much lower now than your current fixed rate, I agree it might be cheaper to just pay the penalty. Your mortgage provider will be able to advise.

I have a fixed rate on my own and am now selling and buying with my hubby. I am porting that part of the mortgage and taking out the rest of the mortgage on a different (brilliant) rate. Not long to go on the other fixed rate and was cheaper long term to just keep it.

Not saying that same rule applies to all mortgage providers, but, for me, yes, it was possible.

Jx

kingstreet

IvoryJ wrote: »

Hi there, sorry if this sounds naive but can anyone tell me what is the likely outcome in this scenario:

I have a fixed rate mortgage deal. During the fixed rate period, I decide I want to sell my property and buy a new one with a partner.

Are mortgages portable enough to cope with a new property and a new ownership arrangement (and possibly a new LTV) or would I have to get out of the fixed term (or wait for it to end) before I could buy the new property?

Thanks for any advice you can provide!

If your current rate is portable it will be mentioned on the KFI and on the offer from when you took it out. Portability is the ability to transfer the rate from one mortgage to another when you move house.

In practical terms, you have to approach your lender for a new mortgage on the new property and satisfy their current criteria and status requirements. If you are borrowing less, a partial repayment charge will be likely. If you are borrowing more, the extra money will be on a choice of the lender's current products, with the current rate ported to the existing amount you owe for the remaining time.

Try to match the new deal (if you need one) with the time remaining on your current deal so you know you can move the whole mortgage to a new deal or new lender at the same time.

Remember, it is not a guarantee of a mortgage, merely the opportunity to see out the original offer. Applying for the new mortgage with a partner may negate the portability in your current agreement.