How to Increase Mortgage

TheDirector

We have a lifetime fixed tracker at a good rate and whilst we can transport it if we sell our house and by a new one, the lender says they do not offer increased lending. So they won't increase the mortgage and neither will they offer a second mortgage product as additional lending.

So if we wanted to borrow more in order to get a bigger house am I right in saying that our only option is two get rid of the mortgage and get a new one for a higher amount? i.e. I presume you can't transport the current mortgage over and then get out a seperate mortgage with a different lender as I imagine you cannot have two mortgages with two different lenders for one house?

Thanks.

jimjames

It's not the only option.

You could pay for the difference between the properties from savings and port the mortgage as is.

Thrugelmir

Who is your current lender?

amnblog

You could port the current mortgage and take a second charge mortgage to top up the lending after you had purchased the property.


If you need to borrow more against the property in order to make the purchase you are looking at a different lender.

kingstreet

Which lender is this? I'm assuming it is still open to new business.

It's possible the way you are phrasing your questions to your lender is confusing them.

They may think you are asking for additional borrowing on your current home, also known as a further advance, not a new mortgage for a new house purchase.

When you move house, your existing mortgage is repaid. You take out a new mortgage for the new purchase. If you take out that mortgage with the existing lender, it may be able to port the rate from your old mortgage to the new one.

If you do this, any increased borrowing is usually offered on one of the lender's products available at that time, based on the loan to value of the new mortgage versus the purchase price.

You end up with one mortgage, split into two sub accounts to reflect the two amounts and two different rates which make up your mortgage.

As the mortgage is the piece of paper which ties the loans to the property as security you can't transfer a mortgage from one property to another, but you may be able to port the rate from one to another.

TheDirector

Thanks for the replies. I am with Britannia. I made it clear to them when enquiring that I was talking in the context of selling the house and buying a new one. So i want to either move the mortgage to a new house with an increase in the amount in order to help with the purchase of a more expensive house OR port the existing mortgage and take out a second product on a different rate to top-up the amount required for the purchase. They said no to both. Apparently it is because of the product I have that I am required to take out a new product with new rates if I want to borrow more from them. I am able to port the mortgage with no increased borrowing. I guess I will have to just a get a new mortgage whether it be with them or a different lender. I can only imagine they do this because the tracker we got was a good rate.

kingstreet

They don't take business from brokers, so unable to answer.

Thrugelmir

TheDirector wrote: »

I can only imagine they do this because the tracker we got was a good rate.

Britannia is now just a trading name of the Co-Op. Their financial position is well documented. So their decision not to wish to port the rate is most definately a commercial one. Britannia won't be writing new business either. The mortgage book will be in run off mode.