Porting a Mortgage

poshboy

Hi all,

Just need to make sure my understanding of porting a mortgage is clear. I have a mortgage of £90k remaining and hope to sell my property for £105-£110k. The property I want to buy would be in the region of £165k.
So what would happen when I move? Say I sell for £105k and buy for £165k. I've worked out that I can add £30k of my own money to the new house and then I'd also have £15k profit between my house sale and the remaining mortgage, so thats £45k of deposit effectively used towards the new house. So that would leave me needing to borrow £120k in total, so would need to borrow £30k additional.
Hope you've all followed that. So can I class the £45k as my LTV when looking at mortgages and would I be left with one mortgage at the end, with £90k of it at my old interest rate (1.24% tracker) and then the remaining £30k at the new interest rate? Is that how it works?

Thanks all,

Lee

Goldiegirl

Yes, that's pretty much it.

You'd have to make sure that your lender allows you to 'port' your current product, but if so, you'd end up with a new mortgage, which would have £90k on your current product, and £30k on a product from the lenders current range of products on offer

AlexMac

I guess it would be up to your lender, and I can only speak from experience but we did just that a couple of years ago with Nationwide; we had a great tracker deal on bank rate plus 0.75% (so almost the same as yours) on an interest only loan a bit higher than yours. When we traded up to a bigger house, we topped up the mortgage by a sum rather more than your additional lending requirement. Nationwide gave us the then best deal they could- about 3%, but you might do better now. They called it an 'additional advance' or similar, so when we go online they show as two separate mortgages. That's helpful, as if we pay off any capital sums, we can pay the dearer one off 1st (neither have early repayment penalties). So while not everyone gets on with them, we're well-pleased with 'em; and they're still a mutual!

Thrugelmir

You need to check whether current your lender will port your current interest rate. Many find a reason not to.

Remember to factor in all the costs of selling and buying into your calculations as they do add up.

poshboy

Thanks everyone. Have rung the lender and I can port my mortgage, so good news. You've been really helpful. A lot of figures been going round my head of what can afford and how to do this, but definitely want to port as my current tracker is 0.74% plus 0.5% above base rate, which is pretty good!