Two Mortgages

Sean71

I am away to buy a new build property for £200000 and I am part exchanging my current one for £98000. I currently have an interest only mortgage with the Woolwich, which has 6 years and 7 months to run with a balance of £39000 to be paid at the end. I plan to use £62000 from savings to fund the purchase. Can I keep my existing mortgage going, using my new house as security, and take out a repayment mortgage for £40000 for the rest, to be paid over 15 years? I made a general inquiry on the phone to the Woolwich about this a week or so ago and was told I could, but then when I phoned the number to apply for it, I was told I couldn't. So either the first person I spoke to didn't know what they were talking about or the person I tried to arrange it with is on commission and would rather I remortgaged for £80000 (?). I am right in saying that if I start the £80000 one, then all the interest payments I've made on my current mortgage will have been for nothing and I'll basically just start paying it all over again?

Thrugelmir

Quick answer is no. Your existing mortgage is discharged when the property is sold.

You need to apply for a mortgage on the new property.

Interest is money you pay on borrowed money. To reduce the amount of interest you'll need to repay the debt quicker.

kingstreet

A remortgage is a transfer of the mortgage from one lender to another on the same property. As Thrug said, if you are moving, it's a whole new mortgage secured on the new property, as the old one is paid off by the sale proceeds.

If the old mortgage is portable and your lender will give you a new mortgage, you could port the rate from the old one to the first part of the new one. Any increased borrowing is offered on one of the lender's new rates, so you end up with a single mortgage, split into two sub-accounts, to represent the two differently rated portions.

You may be able to opt for "part and part" with the current amount on interest-only and the new element on repayment, but that will be subject to your lender's attitude to interest-only and possibly to you having a formal repayment plan to cover that element.

Sean71

Thank you both so much, I can finally stop stressing about it and get on with doing it now. I guess I didn't explain what I wanted to do properly to the first person I spoke to, or he possibly misunderstood me.