Existing Nationwide customer moving house

luc2009as

Hello,
I am an existing Nationwide mortgage customer who is selling their home and purchasing a new house. I currently owe 97k on a house selling for 163k. I am buying a new home for 275k. Basically, I need a mortgage for 175k but instead of giving me this they have informed me that my existing mortgage will continue to run and I will have another mortgage running side by side for the remaining amount required for my purchase. Surely this cannot be right. I don't want two mortgages I just want one simple mortgage on one rate. My existing deal expires next May surely I cannot be expected to have two mortgages with two separate expiry dates. Also, if I choose mortgages with product fees does this mean that I will have to pay two separate product fees one for each mortgage. Again, surely this cannot be correct.
I like the Nationwide but I feel as though I have no option but to go elsewhere.
Any advice will be greatly accepted and appreciated.

Luc2009as.

Thrugelmir

More than likely your existing mortgage product carries an early redemption charge so the advice they are giving you is correct.

The mortgage is the charge placed on the property. You can have any number of loans under the mortgage charge.

glosoli

The benefit of porting the existing mortgage across is you avoid any potential redemption penalties.

Any new borrowing must be taken on a rate commercially available.

The downsize of porting is your current deal may be running out soon, and will have to go through another product switch application at that time (and be subject to another arrangement fee).

One option is to take the new borrowing on the SVR rate with no tie ins, and when your current deal expires either merge both balances together (be careful of varying maturity dates, this may be seen as a term increase or a term decrease) or alternatively find out from nationwide if the 1 arrangement fee will cover the set up for both parts of the mortgage.

The situation you find yourself in is not uncommon and happens with all customers porting across an existing rate.

Kind regards

Craig

luc2009as

Thank you for the replies guys. I am still not convinced. I am selling my house and through this sale I will receive 163k. With these funds I want to pay off my existing mortgage of 97k. I then want to buy a new house for 235k and want to apply for a new mortgage for this. I am not seeking additional borrowing. I am not staying in my current house and building an extension or making other home improvements. I feel as though I am being treated like someone applying for additional borrowing.

kingstreet

You will not have two mortgages.

You apply to your current lender for a new mortgage for the full amount you need to borrow. You may choose to port the rate from the old mortgage to the new one for the amount you currently owe. Any increase in the amount you are borrowing is offered on one of the lender's current products for existing borrowers moving home.

You will have one mortgage, split into two sub-accounts to represent the two different rates.

You cannot transfer a mortgage from one property to another. On sale, the old one ends and a new one starts on your new home.

If you do not wish to port your current rate, apply to the current lender for the total amount, but take it all on one new product. If you do not wish to remain with your existing lender, apply for the total amount from a new lender.

Either way you will be vetted like a new applicant. If your current mortgage product is within a penalty period for early repayment, not porting will trigger the charge.

luc2009as

Kingstreet,
Thank you for your reply. If you may, I have a few more questions. First of all, I told the Nationwide that I did not want to port my mortgage but instead wanted one new mortgage all on the same rate and they informed me that I couldn't do this. Second of all, surely porting your mortgage is only beneficial to me if my current rate is lower than the new mortgage, which is not the case. I am currently on 3.59 percent and my second sub mortgage will be on 3.19 percent. In effect, I will be paying more than I would if I just had one mortgage sum on 3.19 percent. Also, my other concern is that if I take the second part of the mortgage on a fixed five year deal starting next month and, bearing in mind, my existing mortgage runs until next May what happens if come May the interest rate shoots up and I want to leave to go with another lender will I have to pay an early repayment charge to get out of the second part of my mortgage which I am just about to fix for five years. I hope that is easy to follow because I am confused myself.
Basically, I don't want a mortgage on one rate with 16 years until completion and a second mortgage on a different rate with 25 years until completion. What can I do.
Any help greatly appreciated.

kingstreet

I'm not sure what you were told is true.

It is my understanding that you can repay the existing mortgage and pay any penalty and take a new mortgage on a new product, as long as you don't try to add the penalty to your borrowing.

This is "bending" what happens for those not moving home who want to change to a new product during a penalty period. They are allowed to do this, as long as they pay the penalty from their own resources. IMHO this should not even be an issue for someone moving house, but lenders move in mysterious ways.

As I think about this, I can't see why you cannot simply march into a branch of Nationwide and apply for a new mortgage. The old one will simply be paid off on the sale, complete with penalty. It is only the discussion about porting which has muddied the waters. If you do not want to port, you do not have to...

On your other issue, the two products included in a port can/should both be over the same term, 16 years or 25 years. It would be unlikely you could/should have two repayment periods within one mortgage.