2 part mortgage - can i move one part?

Ivrytwr3

Hey all,

We bought a property in 2005 and were on a 5 year fixed - this expired in Dec 2010.

We then sold that property and bought another in Oct 2010 at a higher price. We ported that mortgage and got another to cover the cost of the property.

So we now have 2 x mortgages for the same property (with me so far?!) We have been overpaying the higher % mortgage at £190 per month.

One part of the mortgage stands at £60k @ 1.25%
The other part at £32k @ 4.24% with 9 years to go or 6 if we continue with the overpapyments.

Can anyone advise, should we stick with what we are doing or are we able to take the 4.24% part of the mortgage elsewhere?

Thanks.

JimmyTheWig

You can't, realistically, have one property with two different mortgage companies.
But you can get your 4.24% rate moved onto a new deal with the same mortgage provider.

If you do, it is worth bearing in mind what you want to do when the deal on the other part of your mortgage ends. In many ways, the best thing to do is to time it so that both deals end at the same time.

£32k is a low amount as far as mortgages go.
What you need to look for, then, is a deal with low (preferably no) fees rather than necessarily going for the lowest interest rate.

Ivrytwr3

The mortgage is with Santander - so as you say i am stuck with them as i do not want to lose the 1.25% on the higher part of the mortgage.

JimmyTheWig

Presumably the 1.25% is some sort of tracker. What's the deal with being tied in / when do you get moved from that onto SVR?

Ivrytwr3

Our 5year fix ended 2010 and we were moved to 1.25%.

Both fixed are now expired, 1 at 1.25% and the other at 4.24%.

JimmyTheWig

Are you saying that the 1.25% is a tracker for life?

Ivrytwr3

Yes...........

getmore4less

With the low cost tracker just look at what they have to offer for the other bit watching out for fees.

£32k @ 4.24% with 9 years £357pm interest is £6550

£190 overpayment(£547) 66 months interest £3912

find a rate of say 2.5% 63 months interest £2160

So there are more savings to be made.
http://www.santander.co.uk/uk/mortgages/existing-mortgage-customers-changing-deals

a 5y no fee fix might be a good starting point to benchmark.

JimmyTheWig

That's a good rate.
In which case it doesn't matter (from the two-loan point of view) if you tie yourself in with the smaller part.

Phone them up and see what they offer you.

Ivrytwr3

Ah, just remembered, it's with Alliance and Leicester, that's why i can't input my mortgage number

I will give them a call tomorrow and see what they can offer.

Just so i'm clear, i am able to change part of the mortgage (4.24%), whilst still keeping part 1 at 1.25%?

JimmyTheWig

Ivrytwr3 wrote: »

Just so i'm clear, i am able to change part of the mortgage (4.24%), whilst still keeping part 1 at 1.25%?

Yes, definitely.
As long as you keep with the same mortgage company they are like two seperate loans.