Porting, top up, new deal???

james1089

Hi all


I've recently had an offer accepted on a property and we've also sold our property. We are currently in a 3 year fixed rate mortgage deal with nationwide of which there are 8 months remaining. I've got a decision in principal and i'm awaiting a phone call this week from Nationwide's mortgage advisor who will go through our details etc. and hopefully approve our application officially.


However I am confused with various things I have read online recently regarding porting mortgages. I was told by nationwide that I would need to port my existing mortgage to the new property or pay the early repayment charges. This is fine I understand that, however we are borrowing around 100,000 more than is on our existing mortgage, how is this then repaid? on our existing deal that we are taking with us? Or is it under a new deal for the extra amount? Although we are borrowing more, our LTV is going down so technically we should be eligible for a lower rate. I'm concerned that we are going to have two different deals outstanding at the same time and both finishing on different dates, meaning we will be forever re-mortgaging twice.


Any help would be greatly appreciated.


Kind Regards


James

kingstreet

james1089 wrote: »

I'm concerned that we are going to have two different deals outstanding at the same time and both finishing on different dates, meaning we will be forever re-mortgaging twice

That's exactly what can happen.

Look at using a penalty-free two year tracker for the increased borrowing then you can renegotiate both sub-accounts when the existing bit ends.

james1089

Thank you for your quick reply,


That makes sense yes, but when our current deal ends in around 8 months time we automatically go on to a SMR of 3.99% which would sky rocket our repayments, are you saying to take out a 2 year tracker deal with no erc's applicable on the extra balance and then remortgage in 8 months time for the full amount?

JimmyTheWig

Yes, that's exactly what (I believe) kingstreet is suggesting.
The fact that you are only a few months into a 2 year tracker is meaningless if there are no ERCs.
At that point you can move onto a new deal with Nationwide or remortgage to a different company.

Note that it will probably take a good few months to finalise the moving process. So you'll be paying the two year tracker for a very short time.
Basically what you want is a deal where you minimise the arrangement fees plus ERCs, without really worrying about the interest rate.

james1089

Fantastic, thank you both, there's a 2 year tracker deal available to me of 1.84% with no early repayment charges and no set up fee, ill go for this then re-mortgage to the best available deal on the full amount in January.

kingstreet

JimmyTheWig wrote: »

Yes, that's exactly what (I believe) kingstreet is suggesting

He is indeed.

kingstreet

james1089 wrote: »

Fantastic, thank you both, there's a 2 year tracker deal available to me of 1.84% with no early repayment charges and no set up fee, ill go for this then re-mortgage to the best available deal on the full amount in January.

Is there, really?

That really is quite remarkable...

BTW if you stay with your current lender, you are asking for customer retention deals. It's only a remortgage if you get a new mortgage from a new lender to repay the old one.

You're welcome!

james1089

Yeah I thought it was a really good deal too, that's just a figure I got from the nationwide website based on my ltv, so I'm hoping I can secure it.

So if I was to stay with nationwide, should I be looking to get a better deal with them besides other lenders? Do I have enough leverage to demand a better deal or are they happy to loose my custom?
Sorry for the questions but this is the first time I've moved and I only got my first mortgage 2 and a bit years ago.

kingstreet

You can ask your lender what customer retention options it has available to you, then compare them against the options you would have by remortgaging elsewhere.

If the ERCs on the initial product have ended and there were none on the product you took for the additional borrowing, you are in the best possible position, aren't you...?

... and people say brokers aren't worth what they cost...!

james1089

Yeah I guess we are, thank you for your help.

I'll keep an eye open for your invoice

kingstreet

james1089 wrote: »

Yeah I guess we are, thank you for your help.

I'll keep an eye open for your invoice

If I had a pound for every...