Porting Northern Rock Mortgage

Ads1982

Hello all. Quick question for anybody who may have the answer. I have just come to the end of my together mortgage deal. I currently owe about £200k on the mortgage (with northern rock asset management) House value is approximately the same.

Does anybody know if I am able to port my mortgage if I were to say sell my house and buy a different one? I would be looking to downgrade so new property might be worth £160k. This would effectively cut 20% off my mortgage and make things a lot easier. Is this allowed?

kingstreet

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.

You'll need to ask NRAM, as they are anxious to get rid of borrowers not give them new mortgages. In addition, if your current offer is ended, I'm not sure what you'll be able to "port."

Remember, it is not a guarantee of a mortgage, merely the opportunity to see out the original offer. As that has expired, as I said earlier, I'n not sure what you'll be porting.

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. Your lack of equity and therefore a deposit on the new property is likely to be your biggest stumbling block. A purchase now requires at least a 10% deposit, plus funds to cover the associated costs.

You may be better off simply looking at a new deal with a new lender if you can square the deposit issue.

When you say you owe £200k, is that just the mortgage or the unsecured loan included?

Ads1982

That £200k comprises of £187k secured and
£13k unsecured. As I understand it I am on their svr of 4.79 for the remainder of the mortgage term (of course I realise that the svr can and will rise). So this is what I mean when I'm porting. As far as I understand it I have that product for as long as I want it until the end of my term.

So my query is will they let me move it to another property of less value. This would also provide me with some sort of buffer when rates start to rise. I have been paying 5.99 so as I see it can withstand a fair few rate rises. Also, if I had a £150k mortgage instead of £200k I could take an even bigger hike on the rates.

I see this as a good option because I cannot really square the deposit issue away. I can afford my mortgage as it is but unfortunately would take me at least 3 years saving to get the £15k deposit required for 10% of a £150k house.

kingstreet

Ok. So you have a £187k secured loan.

If you sell for £200k, that leaves you £13k equity. That £13k could form part of the deposit for your next home, provided you have other funds to increase it and cover the selling and buying fees.

The questions you are going to have to ask NRAM are;-

- will you give me a new mortgage (their current criteria applies)
- if yes, what's the maximum loan to value
- can I port standard rate outside the product period?

and you'll need to remember the unsecured loan will have to continue as it is.

shy2011

You will be able to port the SVR across to a new property. They will probibly look to do a LTV swap at best with no increase in the borrowing. If you ring them they will go through this on the phone with you. As you are looking to decrease the loan that is in your favour however they will not increase there ltv exposure.