Porting Mortgage Advice

janines_boutique

Hi,

I am currently 1 year into my 2 year fixed term mortgage but I am interested in selling my property & porting my mortgage over to a new property (I have checked in my mortgage terms & I am able to do this).

My query is as follows.... For my current property I put down a 10% deposit & therefore currently have a 90%LTV mortgage - however we have done a lot of work on the house and should be able to sell it for more than we paid meaning on the purchase of our next house we should be able to increase our deposit to 15 or 20% meaning 80-85%LTV - now obviously in any other situation when not tied into a mortgage deal already the interest rate would be much lower (3.85% instead of 5.69%) BUT my question is if I am already in my fixed period even though i have more equity in the new house would it still remain at 5.69%...?

Secondly, because the house we are looking to purchase is a bigger and more expensive house although our deposit will be higher we would need to borrow additional money - would this additional borrowing be on a new deal that takes into account the 15-20% deposit and therefore has the lower interest rate of around 3.85% or would this be the same as my current interest rate of 5.69% (thats if the answer to my above query is that it can not be reduced even though i have more equity and it will stay at my current interrest rate of 5.69%)

I hope this all makes sense! Please let me know if it does not.. any advice / info would be greatly appreciated.

Many thanks,

Janine x

Thrugelmir

Porting is the transfer of the terms and conditions attaching to the mortgage not the actual mortgage itself. So you be transferring your existing mortgage balance at its current interest rate.

Any additional borrowing will be at current rates i.e. a different product.

Any port will be subject to current underwriting criteria and require a full new mortgage application.

janines_boutique

many thanks for such a promt reply i really appreciate it - so just to clarify... even though i will have more LTV in my new property my current interest rate will apply (5.69%) for the amount I have remaining on my current mortgage & then any additional money borrowed will be a completly new mortgage + therefore will take into account the new LTV on the new property... do you happen to know if there is usually a fee for porting? I have read through all of my information & it says I am able to port it over & that I will have to pay the early repayment charge of 3% but that will get refunded once the transfer has all been put into place - thus implying no other fees apply does that sound right?

thanks again!

Thrugelmir

There'll be the normal fees for redeeming your existing mortgage.

Check with your lender if there is a fee for the porting element of the transaction.

You'll need to apply for a new mortgage which will have 2 sub accounts. One your existing mortgage balance and the other your additional borrowing.

Simon_gloster

All that correct.

You dont have to port your current deal, but as you say ERC's will apply.

Your new mortgage, if you port, will be split into 2 sub accounts.

1. Ported amount
2. New amouny based on that LTV.

Your solicitor should be able to get the ERC's waived if your staying with them. Some lenders are anal though and will make you pay and ring back for a refund. Set the money by jus in case.

janines_boutique

Thanks to both of you - makes much more sense now!!

I'm going to sit down and work out what works out best a) paying the early remdemtion fee + starting a fresh new mortgage on a lower interest rate due to lower LTV or b) porting over my existing remaining mortgage on my current rate + then get the additional borrowing on top with the newer LTV interest rate...

But either way I am just really pleased that it looks like something I can do & is going to be affordable so that's brilliant news! :T thanks x

Simon_gloster

Just out of curiousity, do you know when your erc's fall into the 2nd year?

janines_boutique

I'm not sure... My term fixed period comes to an end June 2013 & I've read that I can change my deal within 3 months prior to that date so from around March 2013 onwards, so im presuming that thats when the ERC charge would come to an end too if I stayed with the same company for a new mortgage deal but i'd really like to move before then

Simon_gloster

So i'm assuming you took your current deal late spring 2011. There is a stronh possibilty the % scale will drop july 1st 2012. Depending on when you're a proceedable buyer, this erc % timing I likely to be an important factor of whether to keep the existinf deal.

Grab some advice via an appointment.....is my advice.

janines_boutique

Ah right I thought my ERC just stuck at 3% regardless of how far into my existing deal I was.. but I will definitely get some further advice. Thanks again x