Remortgage Top Up Only?

skiddy1903

Hi
I've been struggling to get a conclusive answer to a question and thought someone on here might be able to help.
We're looking to move at the moment for which we'll need extra borrowing. On our current mortgage we are 1 year into a 5 year fixed rate so we will be porting that to avoid the 5% ERC.

We are therefore tied into our current lender, Santander, for the new borrowing. We've been offered a few different top up deals for the extra borrowing most are 2 and 3 year fixed rates although there is one lifetime tracker in the running.

My question is. Can we remortgage just the top up at the end of the initial rate to another Santander deal if it is favourable to do so?

I'm thinking if we selected a 2 year fix for the top up we could then remortgage the top up portion only at the end of that deal to another 2 year fix. That would then mean the 2nd 2 year fix and our current 5 year fix would both end at the same time and we'd be free to remortgage the whole lot at that time to any lender.

Alternatively if we take the life time tracker, with no ERCs, for the top up we could switch that to either a 3 year fix in a years time or a 2 year fix in 2 years time to get the end dates to match.

Obviously we'd need to work out if it is favourable to do that considering any product fees etc. But I first wanted to know if it was possible to do it with a top up mortgage?

What I want to avoid is too long on the SVR after the end of the top up deal and before the end of the existing 5 year deal.

Doing the above has the potential to avoid the SVR completley but if it isn't possible then a 2 year fix would leave me exposed to the SVR for 2 years. A 3 year fix leaves me exposed for only 1 year so would probably be worth the higher rate today. Although that's where the tracker could prove it's value in the final year of our current 5 year fix, depending on what happens to rates of course.

Thanks in advance.

dimbo61

As you have already stated you are staying with your current Lender Santander due to the 5% ERC so why not take the extra on the lifetime tracker.
Overpay which ever part has the highest interest rate at the time.
Most of your mortgage debt is already on a long term fix so the tracker may be the cheapest option for the extra borrowing.
If a good 3/4 year fix does come up you can always swop to that.
No real signs the BOE base rate is going up any time soon !

StuC75

Yes only the 'top up' part would be up for renewing in 2/3 years time, since the original pot would still have 1/2 years left.. since they essentially treat the amounts as different pots..

In regards to how long to fix, look at the kfi documents to get a handle on what kind of equity you may have in 2/3 years, since that may then impact what deals you have available at that time..

skiddy1903

Thanks for the replies;

Yeah the tracker deal is probably the one to go for so long as it can be switched to a different deal before the end of the current 5 year fix, on the main part of the mortgage, if it makes sense to do so.

My question was really can that be done? Rather than which deal should i go for?

In 2 years time for example i want to change the top up only to a 2 year fix Santander aren't going to turn around and say, sorry you can't do that cause it's a top up mortgage. You're stuck with that deal, whether it be the SVR after a fix rate ends or the tracker, for the next 2 years unless you want to pay the ERC to move the full amount.

Equity at the end of the fix shouldn't be much of an issue as we'll only be around 60% LTV on the new house just now so we should be ok for most of the best rates when it does come time to deal again.