How does porting (and extended borrowing) usually work?

pivotalgubbins

Although I will be contacting my mortgage provider (Skipton) for exact details I thought I would try and get some idea of the principles for porting my existing mortgage before I have to go through hundreds of different options on the telephone system to actually talk to someone.

Essentially, my situation is this. I have a mortgage I can port (with £108k outstanding) and I am looking to move house to a property which will require £140k (and therefore £32k of extra borrowing).

I did have an initial chat with Skipton and they explained that I would port the £108k across and then need to take a new mortgage for the additional £32k. This is fine in principal but I was wondering:

(a) My £108k mortgage is due to expire in November this year? Will that still happen if it is ported? I'm keen to get the rate down then as it is at 4.48% (and my new LTV will be ~55%).

(b) What happens to the additional £32k? Will or can that expire at the same time or will I be tied in? I guess I'm questioning whether I should expect to pay an early repayment charge (which should be small if I can choose the right product) or is there anything else I should be thinking of?

Any advice appreciated!

Thrugelmir

Mortgages don't expire. However the product can.

If you port your existing mortgage and take out further borrowing. Then you will have 2 sub accounts attached to the mortgage. These sub accounts will have the same final redemption date. When you have 2 sub accounts you could incur product fees on both parts. So may well be worth combining them together at the earliest convenient point in time.

As your existing mortgage product expires in November. May be worth taking the additional borrowing on the SVR rate. Then you'll incur no penalties.

Typhoon2000

When you sell your house you pay off your mortgage. When you buy a new house you apply for a new mortgage (which may be declined with new stricter lending criteria). If you wish, you can port your previous rate to your new mortgage if you think it may be beneficial to you.
If you are currently on a fixed or discounted rate , there may be redemption fees to pay if you don't port your old rate. I imagine you mean your fixed/discounted rate is due to end in November this year, and your new rate is likely to be the current SVR. If you port this across, the 108k, will still revert to the SVR in November. As for what happens to the 32K, that depends entirely on the mortgage product you chose for that and is separate for the November date.

suziqqq

we asked to port our mortgage after 13 years but it was declined as we no longer meet the lending criteria. We have just got our mortgage offer from the halifax for a new mortgage.

pivotalgubbins

Thank-you for the replies.

Apologies, I wasn't very clear. I did in fact mean that my fixed-rate comes to an end in November and if I didn't port the mortgage then I'd need to pay redemption penalties (roughly £3k).

I imagine then that I need to port the £108k and then get the best deal I can on the £32k (which will probably be a higher let but no redemption fees I think). In any case, even 3% of £32k won't be the end of the world in November.

Thanks for highlighting the additional lending criteria too - I think I'm okay as there borrowing calculator suggests I could go as high as £250k (which is frankly mental!) so total borrowing will be £110k less than this and less than 3 times my current income.