Can I negotiate a discount when redeeming a cheap mortgage?

HKS1

We currently have a mortgage spit roughly 2/3 on a newer "market rate" and 1/3 on an old rate at .94 over base (for the remainder of the term) which was ported over from my wife's previous home.

Both have 19 years to run.

We have a child or the way :beer: and my wife is adamant that we need to move to somewhere bigger.

Assuming that we did move... In an ideal world we would simply port the existing mortgages and top up however my understanding is that any top up would need to be over the same time period (19 years) which would make the monthly repayments the limiting factor and I would prefer to avoid being committed to a large monthly repayment.

If we were to repay the mortgages and remorgage entirely we would loose the benefit of the .94 above base portion.

As the bank must be making a loss on the cheaper portion of our mortgage, what are the chances of us being able to negotiate a discount when redeeming? Is this even an option?

I hope the question makes sense and isn't too much of a ramble. Thanks in advance for any help.

HKS

Conrad

HKS1 wrote: »

As the bank must be making a loss on the cheaper portion of our mortgage, what are the chances of us being able to negotiate a discount when redeeming? Is this even an option?


HKS

I'm not following you on this bit at all, so I'll just answer the general thrust of the rest of your question.

Essentially you can port those existing juicey deals, you'd be mad not to. So that's that done.

Now the top-up does not usually have to be over the remaining term unless your age is a restriction. In other words it could theoretically be for a different term, say 25 years and thus more affprdable.

If affordability is your prime driver hear, changing lenders is not going to be an option unless something like a total new package over 35 years happens to work out cheaper.

Interest only is a no no in many cases now.

HKS1

Conrad,

Thanks for coming back to me and sorry I was a bit unclear.

I had been under the impression that if we moved then any additional top up that we require would need to be payable of the same period as mortgage that we were porting. Is this the case?

If any new top up mortgage needs to be repayable over 19 years rather than 25 then this will make it less affordable for us on a monthly basis but it seems from your reply that I was mistaken.

If we needed to have all products repaid over the same period I thought that we might be able to amalgamate our existing deals into a single mortgage but negotiate a discount from the capital in recognition that we were giving up the low interest rate deal?

Conrad

HKS1 wrote: »

Conrad,

Thanks for coming back to me and sorry I was a bit unclear.

I had been under the impression that if we moved then any additional top up that we require would need to be payable of the same period as mortgage that we were porting. Is this the case?

If any new top up mortgage needs to be repayable over 19 years rather than 25 then this will make it less affordable for us on a monthly basis but it seems from your reply that I was mistaken.

If we needed to have all products repaid over the same period I thought that we might be able to amagamate our existing deals into a single mortgage but negotiate a discount from the capital in recognition that we were giving up the low interest rate deal?

Ok I got you now. No there is no special discount for your giving up an existing rate - it would turn lenders books and systems to mush if these sorts of off the cuff deals were done and any investor buying up these assets would be very uncomfortable with a plethora of tailored special ad - hoc deals lurking deep down in the books.

TERM - you should be able to arrange the top up over a differing term of years, but check with your lender in case of a clause regarding this in your original mortgage terms (they change all the time).

The existing deals may also be done over a differnt term of years - check that one to.

It gets stickier with interest only considerations though. Call your lender and have an idle chat.:beer:

Thrugelmir

HKS1 wrote: »

As the bank must be making a loss on the cheaper portion of our mortgage, what are the chances of us being able to negotiate a discount when redeeming?

The bank may well set a high bar in agreeing to port your existing mortgage terms. Porting is not a given right.

While interest rates remain low building up your savings maybe a better option. If affordability is an issue.

House prices aren't moving upwards either at the current time. So waiting and watching may be of benefit too until the future becomes more stable.