First time buyer - mortgage porting in future

richy4

Quick question about mortgage 'porting', which I understand is the ability to 'move' your existing mortgage mid-way through a deal if you sell and continue the mortgage (and any additional borrowing?) in the purchase the new property?

Hope my understanding above is correct.

If so, I am a first time buyer and about to begin my application for either a 2 or a 5 year fix for a leasehold new build flat.

The only clincher for me at the moment between deciding between 2 or 5 year fix is the ability to 'port' the mortgage should I sell the property during the 5 year period and I would want to continue with Nationwide with the mortgage but on a different, new property.

If this is possible, obviously I would have to make sure my product allows this, is this fairly common and is there a process by which the lender can always refuse to port the mortgage to a new property?

glosoli

Effectively you are porting a rate and not the mortgage, and porting applications are subject to the same criteria and application as any other mortgage application is. Porting applications can and do get declined leaving the customer with little other choice than incurring the early repayment charge if requiring to move. That being said a mortgage advisor will try their utmost to assist given the circumstances.

If you took 100k on rate A, and required additional borrowing during the move, the additional borrowing segment would be on a seperate rate of interest on its own terms, so effectively you would have two repayments each month.

richy4

Thanks for your reply.

OK so to check my understanding, say the first time buyer mortgage is for example, £250k loan amount. After 3 years of my 5 year fix I decide to sell, with say £200k loan amount remaining on the original 'deal'. If I was to move to a property with price of £300k, I'd be porting £200k but if I needed a mortgage for the remainder of the purchase price this would be separate? Could this then be with an alternative mortgage provider or only with the original? I guess it has to be the same or it could get very messy.

phillw

richy4 wrote: »

OK so to check my understanding, say the first time buyer mortgage is for example, £250k loan amount. After 3 years of my 5 year fix I decide to sell, with say £200k loan amount remaining on the original 'deal'. If I was to move to a property with price of £300k, I'd be porting £200k but if I needed a mortgage for the remainder of the purchase price this would be separate?

It would be completely separate & would likely be at a different rate. However, if you plan to clear £50k in three years then I'd have thought you would have to be overpaying. Lenders used to allow you to borrow the over payments back at the original rate, which may give you an advantage.

richy4 wrote: »

Could this then be with an alternative mortgage provider or only with the original? I guess it has to be the same or it could get very messy.

It can be with different mortgage lenders, however they both have to agree to it. I know someone who years ago had had two mortgages with different lenders, one in britain and the other in australia. How likely they are to agree to it will come down to the lender and possibly even individual circumstances.

In three years time we will probably be a year into brexit, trying to predict what rates will be available, whether you will be able to borrow more or even if you will be able to sell your house is kinda pointless.

glosoli

Just regarding the above about having two mortgages on the house with two different mortgage lenders - with your friend it is certainly an exception and not standard practice so OP you should just assume that this isn't possible as virtually every mortgage lender will require first legal charge.