Porting HSBC mortgage

EGGP1878

Hi,

Just after a bit of advice.


My Fiancee and I have a mortgage with HSBC with £160k left to pay - we have only just taken out a 2 year fix at 2.29 with HSBC so have 22 months left on the fix. Its a 25 year mortgage. We have around 60k equity in the property and have both just had salary increases so we are moving to a bigger property.

I've been into HSBC and spoken to a lady who has given me an AIP for the larger property. However, she has said that I will have to just keep my current mortgage for the £161k and take out a 'home improvement loan' at 2.49% for the rest of the money I want to lend which is £138k.


Surely it isn't that messy and I can just port the mortgage over? I want to up the terms to 30 years as well. I'm speaking to a 'proper' HSBC mortgage advisor tomorrow so they may clear it up but just thought I would get a head start here.


Thanks.

mrginge

You apply for a new mortgage on the new property for the full amount of borrowing. If you qualify then the 'normal' scenario is that HSBC apply your current rate to 160k of the balance and the new rate to the rest.

This stuff about home improvement loans is nonsense.

kingstreet

The way lenders train their staff to explain porting is mind-boggling.

If they explain that the mortgage is the deed that ties the loan to the property, not the loan itself it becomes a lot clearer.

When you sell, your current homeloan is repaid and the mortgage cancelled so the property is released from its security.

A new loan is taken from the current lender and this will be secured over the the new property with a new mortgage deed.

On completion day, the lender ports the rate from the old loan to the new larger one, with the increased borrowing offered on one of the lender's new products based on the new LTV.

The new homeloan will be made up of different sub-accounts to represent the different rates within the overall total borrowing.

Since "homeloan" became "mortgage" in many peoples minds, it's become difficult to explain the difference between the two. Hence the popular myth you can transfer a mortgage from one property to another and have two mortgages, etc.

EGGP1878

Thanks very much that clears it up.