Porting/switching thoughts?

morwok

Hi All,

Wondering if I could get some thoughts on this. We have an offer accepted on a place and just negotiating just now on an offer on ours and hopefully we can get what we want.

Our current mortgage is with Tesco fixed until October 2017 at 2.49% and the additional borrowing we would need after moving is about 170k.

Before I speak to them I just wanted to get an idea on what they will offer. Can we switch products mid-term and move the full borrowings to a new rate? Obviously there would be an ERC for this (would they considering waving)? Or is the only option they will give to offer us a second mortgage on the additional borrowings?

I am thinking if we cannot stay with Tesco and switch rates it will work out cheaper paying the ERC and moving to someone else as we can 1.29% on the whole amount?

Any thoughts would be appreciated.

Cheers.

kingstreet

Any increased borrowing will be on a current product if you port the rate on your current borrowings.

You may be able to pay the ERC and have a new rate on the whole borrowings with them, or you could consider a different lender in these circumstances.

AnotherJoe

morwok wrote: »

I am thinking if we cannot stay with Tesco and switch rates it will work out cheaper paying the ERC and moving to someone else as we can 1.29% on the whole amount?

.

Nowhere near enough detail to know. You'll have to do the maths or provide all the numbers.

morwok

Thanks I think I did the maths correctly but will repeat here for sense check.

Existing mortgage left = 191,754 @ 2.49% with 23 years remaining.
New Mortgage would be 362k
If we stayed with Tesco we would see out the one year left on the fixed rate and end of ERC period and remortgage after a year assuming we could get 1.29% which we can now.

ERC is 2% = 3,835.08

We are looking at a new mortgage with HSBC fixed @ 1.29% over 30 years.

It all works out very similar but my calculations the cheapest option is to move to HSBC at 1.29% and paying the ERC now. The balance on the mortgage will be higher but we would have paid out less on mortgage charges, fees etc. to make it cheaper.

The only way it works out cheaper with Tesco is moving products now and they waived the ERC which I doubt they would?

Cheers