Ending Fixed Rate Mortgage

harshbhasin

Hi,
Could anyone please advise on the following;
1. I took a fixed rate mortgage from Santander in 2014 @3.19 interest for 5 years. Now my circumstances have changed, I have babies and realize that I am paying far too much compared to the current rates in the market. Also, with the bigger family I want to but another house and rent out the current flat for extra income. As per bank's T&C if have to pay £7000 as an exit fee if i change my mortgage. Can anyone please suggest me how can i avoid this penalty.
2. How can I switch my existing mortgage to buy to let.
3. Can I take out another mortgage if I already have an existing mortgage payments.

Regards,
HB

saajan_12

How much are the properties worth, how much is your mortgage balance and how much savings do you have?

Depending on the answers to the above, you may be able to:
a. port your residential mortgage to the house (keeping the same deal, just changing the security so likely to incur a valuation fee but not a early repayment charge)
b. obtain Consent to Let on the residential mortgage to rent it out for now
c. take out a second mortgage on to release more funds

eddddy

If I've understood your plan correctly, the steps you could follow are:

1. Buy a new house to live in
- Port your existing mortgage to the new house
- (i.e. the borrowing would be on the same terms: same amount, 3.19%)
- Increase the mortgage, if required, perhaps get the increased bit on better terms - if available

2. Re-mortgage your old house with a buy-to-let mortgage
- on whatever current BTL terms are available

All the above would happen at the same time. Obviously, it would be subject to affordability etc.

(There won't be a way of escaping the high rates on your current mortgage - unless you pay the £7k penalty.)

Guest101

So you can afford both mortgages but you cant afford the one current mortgage? - im confused

G_M

Th high rate you are paing is the price you pay for

a) knowing in advance exactly what you'll have to budget for the 5 years of the term and

b) protecting yourself from any increases in mortgage rates during the term

The downside is not benefitting from reduced rates.

G_M

See also

* New landlords: advice, information & links

* Letting agents: how should a landlord select or sack?

ReadingTim

Answers below, not that you'll like them....

harshbhasin wrote: »

Hi,
Could anyone please advise on the following;
1. I took a fixed rate mortgage from Santander in 2014 @3.19 interest for 5 years. Now my circumstances have changed, I have babies and realize that I am paying far too much compared to the current rates in the market. Also, with the bigger family I want to but another house and rent out the current flat for extra income. As per bank's T&C if have to pay £7000 as an exit fee if i change my mortgage. Can anyone please suggest me how can i avoid this penalty. You can't. That's the price you pay for the certainty of knowing how much your repayments are going to be for a 5 year period. Would you be complaining if rates were more than what yours is? I don't think so....
2. How can I switch my existing mortgage to buy to let. Errr....ask Santander?!? Bear in mind they might not agree, might charge you a fee, and it will probably depend on the equity/LTV you have in the property at the moment
3. Can I take out another mortgage if I already have an existing mortgage payments. You can have anything you like, as long as you can afford it. Can you afford it?

Regards,
HB

somethingcorporate

Had the rates gone in the other direction would you be offering the pay the lender more?