2 or 5 yr fixed?

kingstreet

You would need to study the terms of the product you are considering.

Yorkie1

Another thought: what about taking out the 5 year product, and porting it in 2-3 years' time when you sell up, with the equity from the sale of the other property making up the residue? No ERC if successfully port. And if for some reason the move in 2-3 years' time doesn't happen, then you've got the fixed rate for 5 years rather than having to reapply with all the attendant costs in only 2 years.

astar24

Thanks Yorkie1

When you say make up the residue does that mean I can pay some money off the mortgage when And if I port it? Not exactly sure what you mean. Thanks.

getmore4less

is this rental mortgage free what about contingency? Long term offset might be the way to go.

Yorkie1

astar24 wrote: »

Thanks Yorkie1

When you say make up the residue does that mean I can pay some money off the mortgage when And if I port it? Not exactly sure what you mean. Thanks.

When you port a mortgage, you apply to your lender for a new mortgage for the new property. If they agree that you meet the credit etc scoring, then essentially they lend you the money in two parts. The first part is what is outstanding on your current mortgage at the time, on that interest rate. The second part (assuming that the new mortgage is for more money than the outstanding balance) is new borrowing at a new interest rate. Any equity that you have for savings, from the rental property etc, is treated as a deposit towards the new house and therefore has an impact on what you need to borrow.

Be aware that if you are actually going to reduce your outstanding balance on porting by paying off a load of it, then there will be an ERC on that overpayment, at least.