Porting Questions

djedga

Currently in the process of moving offers accepted on both sides, closed chain.

We have an existing mortgage and didn't know about porting when working out our sums, we just assumed we would just have to pay the early payment charge and get a new deal.

We have 17 years left on our existing mortgage and want to extend the length of the mortgage to 25 years.

My question is will the existing mortgage be extended to meet the new length or will it just run on the existing term of the mortgage?

If we want a 25 year deal are we better off just paying the early repayment fee?

Contemptuous

You're only porting the product, not the mortgage itself.
There's no reason why the new mortgage can't be over a different term, subject to the lender's criteria.

djedga

Contemptuous wrote: »

You're only porting the product, not the mortgage itself.
There's no reason why the new mortgage can't be over a different term, subject to the lender's criteria.

Sorry not sure I understand completely

So rough numbers:
Product 1) current rate of 2.69 on 93000 (17 years remaining term)

If we port the 93000 and borrow an additional 87000 this would become:
Product 1) New deal at current rate of 2.69 on 93000 (25 years remaining term)
Product 2) New deal 1.89 on additional 87000 (25 years remaining term)

So long as the bank will give us the money of course.. The reason I ask is this affects the monthly payments if we have to pay off deal 1 in 17 years not 25!

Thrugelmir

djedga wrote: »

The reason I ask is this affects the monthly payments if we have to pay off deal 1 in 17 years not 25!

Don't base your reasoning on today's low interest rates. Extending the term may have unintended consequences.

djedga

Thrugelmir wrote: »

Don't base your reasoning on today's low interest rates. Extending the term may have unintended consequences.

This I understand - however we wish to do so to keep our monthly payments easily affordable.

We are easily far enough away from retirement age etc. and I know that the rates can/will change over time and it will cost us more in interest.

We are cautious and tend to take 3-5 year fixed deals giving us payments well within our budget. I'd rather know I can afford payments than take a risk.

Any way back to my original question:

Can we port existing product, borrow more on new product and extend the overall term on both products to 25 years? Or does the original product have to remain at 17 years term?

If the latter we will choose to pay the ERC, (which we had calculated for in our budget). If the former we will port, but this isn't clear to me at the moment what our options are!

dano17439

i presume that if you change any terms of your existing mortgage it wont be classed as porting

martinsurrey

djedga wrote: »

This I understand - however we wish to do so to keep our monthly payments easily affordable.

We are easily far enough away from retirement age etc. and I know that the rates can/will change over time and it will cost us more in interest.

We are cautious and tend to take 3-5 year fixed deals giving us payments well within our budget. I'd rather know I can afford payments than take a risk.

Any way back to my original question:

Can we port existing product, borrow more on new product and extend the overall term on both products to 25 years? Or does the original product have to remain at 17 years term?

If the latter we will choose to pay the ERC, (which we had calculated for in our budget). If the former we will port, but this isn't clear to me at the moment what our options are!

Couldnt you port the mortgage as it is, get a fixed rate on the new product that is similar in length to the remaining fixed period on the old, and then roll them together when they both end onto a new 2X year product.

Saves the ERC.

just an idea though.

djedga

dano17439 wrote: »

i presume that if you change any terms of your existing mortgage it wont be classed as porting

If this is the case to get our monthly payments to what we calculated we'd be better off starting from scratch and paying the ERC. Waiting to hear from mortgage adviser but will update here when I get his comments!

kingstreet

You will have one mortgage and you can set the term to suit you.

Within that mortgage, you will have a sub account for the current loan amount and rate for its remaining time and a new sub account for the increased borrowing on whichever of the lender's current products you can choose based on the overall LTV.

pamelab21

we are looking at this porting option too as we wish to move but is there any way of working out what the monthly repayments are when you are running two accounts under (possibly) different rates?

kingstreet

Do two separate quotes, one for one amount/rate and one for another and add them together.

Alternatively, ask your lender or a broker to produce a port KFI for you.