Porting

zyx321_2

Lucky enough to have got Santander flex mortgage but now moving house and want to port it. The product scope was 90% LTV, loan size in range of £25,001 to £2m and interest rate of BOE +0.49% (Product FLX04) when took out the flex a few years ago.

Spoke to Santander about moving and they originally said and re-confirmed later on double checking that they would (a) port the rate of BOE+ 0.49% on full amount of new loan, (b) port the loan to value of 90% to new loan and (c) extend the loan term. New loan to be £1m+.

Now Santander saying can do (a) and (c) on the full extent of the loan on moving but would have to limit the LTV to max of 75% given the loan size. Clearly this new answer makes a big difference to the overall economics of moving.

Questions:

• Are Santander obliged to honour the original scope of FLX04 when we move home?
• If not on what basis should they?
• Having originally been told okay what suggestions for raising it at higher level internally at Santander?
• what compromises might Santander offer (aside from saying we need to find another 15% upfront)?

Any other observations that might get us over the line with Santander?
Would appreciate helpful insights please.

Thrugelmir

Santander are within their rights to change their underwriting critera at any time. There's no right to appeal.

So keep saving while interest rates remain low.

Are you looking to borrow more when moving?

zyx321_2

Thanks. Will be borrowing more. Make any difference?

kingstreet

This seems to be a particularly difficult concept for lenders to explain to their customers. I've never had a problem explaining it to mine, nor have I ever had anyone misunderstand its purpose.

Porting is transferring an old rate to a new mortgage. You apply for a new mortgage in the normal way. You satisfy the lender's criteria and loan to value requirements and when they agree to lend you what you need, they will allow you to transfer the rate from your current mortgage to your new one, when your old property sells and your old mortgage is repaid.

The transfer of the old rate is limited to the amount outstanding at completion and for the remaining time of that rate offer. So if you had a £100k fix with 3 years left, you'd transfer that rate for the first £100k of the new mortgage for that 3 year period. Any extra borrowing would be offered on one of the lender's current products. A reduction in the mortgage would see the payment of a proportionate penalty, should there be any remaining early repayment penalty applicable.

In the case of Santander, they can set the terms for the new mortgage however they like as portability gives no guarantee of the terms and conditions which might apply to the new mortgage. All you can be sure of is getting how much you now owe on the rate you currently have on your existing mortgage.

Thrugelmir

kingstreet wrote: »

All you can be sure of is getting how much you now owe on the rate you currently have on your existing mortgage.

With the revised proviso that the LTV can only be 75%.

So a neat side step as they are not actually declining the port transfer. Yet are making it unattractive and of little benefit.

kingstreet

Thrugelmir wrote: »

With the revised proviso that the LTV can only be 75%.

So a neat side step as they are not actually declining the port transfer. Yet are making it unattractive and of little benefit.

Absolutely. Criteria and LTV are absolute.

I'm beginning to feel another "mis-sell" rumble. "My bank told me if I moved I could take my mortgage with me..." :mad:

zyx321_2

Thank you for comments.

A case of if it sounds to good to be true it probably is unfortunately. That said I checked and checked again - maybe an investment in staff training is required if others are to avoid being misled as we were.

It's the sheer amount of wasted time and emotion that these people don't appreciate they are contributing to when they say what they say.

Fabio_fausti

I also have a similar issue. I'd like to port my current flexible mortgage to a new property and borrow more at my current rate (0.5 above br).

But it looks as though they won't increase my borrowing at this rate but offer to lend more at their current rates which are a lot higher.

But in the past I have ported this very mortgage across to another property AND borrowed considerably more at the same low rate and that was 3 years ago.

So I don't know if they have changed their terms regarding this in the last 3 years?

Can anyone shed some light?

Thrugelmir

Fabio_fausti wrote: »

Can anyone shed some light?

Simply put if they lend money to you at a 1% interest rate they'll be losing money on the transaction.