Porting mortage 30 August 2015 at 5:40PM in Mortgages & endowments 8 replies 950 views

Legacy_user

Good evening,

I am currently considering part-exing my home for a new build. However I am currently in a fixed deal with my current lender, however I can port the mortgage and will then need to borrow a little more.

My 2 questions with this are;

If the interest rates are different, which is paid off first, the higher or lower (or the existing or new borrowing?). NB. it is likely the new/additional loan will have a lower interest rate than my existing loan.

Secondly, when you port and take out additional borrowing are you generally classed as a new borrower or existing (as interest rates for new customers are lower of course!).

My lender is YBS if that helps, but wasn't sure if certain lenders treated this differently or if generally the principle was the same.

Thanks

NB apologies for the title error - cant find a way to edit this!

Thrugelmir

You'll have two sub accounts under the same mortgage charge. The interest and repayment terms will be determined by the terms of each product.

Existing. New is new as customer to the lender.

lizziesmum

We're in the process of porting our mortgage and are going through an application which is exactly the same as it would be if we were new customers. We're not borrowing any more and can prove that our circumstances haven't changed but have still had to provide all our proof of income, had a three hour interview etc. It's been a complete jumping-through-hoops pain in the neck!

amnblog

How does an interview last three hours?

Thrugelmir

lizziesmum wrote: »

We're in the process of porting our mortgage and are going through an application which is exactly the same as it would be if we were new customers. We're not borrowing any more and can prove that our circumstances haven't changed but have still had to provide all our proof of income, had a three hour interview etc. It's been a complete jumping-through-hoops pain in the neck!

I believe the OP's question is directed at being offered preferential interest rates not the application process itself. Mortgages are not simply transferred from property to property.

System

Thrugelmir wrote: »

I believe the OP's question is directed at being offered preferential interest rates not the application process itself. Mortgages are not simply transferred from property to property.

Yes, I knew we would have to go through the lending assessment again, after all our circumstances have changed and we are borrowing more money. As Thrugelmir said, I am more interested to find out how interest is applied if you have 2 separate accounts - i.e. which balance does mortgage payment come off first.

I.e. say current mortgage is 50k (e.g at 4%), and port this deal across and borrow another 50k (e.g. at 3%) to make 100k. If I then pay a monthly payment of £1k does it come off the 50k @ 4% or the 50k at 3%?

This aside, when the fixed deal ends on the first 50k, can I remortgage this part (with the same lender) if have taken a longer fix on the additional part or will I have to stick with SVR and remortgage the whole lot together?

lizziesmum

Thrugelmir wrote: »

I believe the OP's question is directed at being offered preferential interest rates not the application process itself. Mortgages are not simply transferred from property to property.

I'm terribly sorry for misunderstanding and will now crawl quietly back under my rock.

Thrugelmir

lizziesmum wrote: »

I'm terribly sorry for misunderstanding and will now crawl quietly back under my rock.

All of us have misread posts. :beer:

PBA

teepee83 wrote: »

I.e. say current mortgage is 50k (e.g at 4%), and port this deal across and borrow another 50k (e.g. at 3%) to make 100k. If I then pay a monthly payment of £1k does it come off the 50k @ 4% or the 50k at 3%?

This aside, when the fixed deal ends on the first 50k, can I remortgage this part (with the same lender) if have taken a longer fix on the additional part or will I have to stick with SVR and remortgage the whole lot together?

Assuming both parts are over the same term then they would be both paid off at the same rate.

Your scenario is spot on, you can arrange a new rate on the part that's due for renewal. The big down side of this arrangement is that you're always tied in on part of your mortgage. If you want to move to another lender you'd have to move the whole amount, so you'd either have to leave part of the mortgage on SVR while the other part ran out or pay an early repayment charge on the bit that was still tied in.