Moving house during fixed rate?

SpiraliS

Never moved house before,

Current mortgage is £200,000 @ 2.49% (5 year fix Jan 2017 with Santander, so just done 1 year of it)
Hoping to sell this house this year for £300,000
Hoping to then buy a house worth (say) £500,000.

Santander say the mortgage is portable. But how does this actually work in reality? Once the house is sold, great we have £300,000 in the pocket but does that then pay off the original £200k mortgage and I start again with a fresh mortgage? Or does the existing mortgage stay untouched and Santander give me a 2nd mortgage at a completely different rate? Can you even have 2 mortgages on one property?

Any help really appreciated

Thrugelmir

SpiraliS wrote: »

Or does the existing mortgage stay untouched and Santander give me a 2nd mortgage at a completely different rate? Can you even have 2 mortgages on one property?

This is the principle. The existing loan is transferred to the new property. Any new borrowing will be a separate loan in the form of a mortgage product currently available to you.

There is only one mortgage on a property. As this is the legal charge placed by the lender to secure the total debt owed. You'll have two loans / sub accounts to finance the purchase of the new property.

DragonQ

Thrugelmir wrote: »

This is the principle. The existing loan is transferred to the new property. Any new borrowing will be a separate loan in the form of a mortgage product currently available to you.

There is only one mortgage on a property. As this is the legal charge placed by the lender to secure the total debt owed. You'll have two loans / sub accounts to finance the purchase of the new property.

If you port an existing mortgage to a new property and you need a second loan to make up the shortfall, I assume it has to be with the same lender as your original mortgage in that case? I guess that's a disadvantage of long-term fixed rates then: if you move, you're stuck with one lender and their rates at the time might be bad.

bertiewhite

When I bought my last house, I was in the middle of a fixed rate period. As the new house was cheaper than the one I was selling, Virginmoney effectively gave me a new mortgage but kept the existing fixed rate period.

I guess it depends on your circumstances & lender.

dimbo61

You need to consider the Loan To Value !
When you took out your £200,000 mortgage was the LTV 75% or less ?
If you move to a bigger property and can't put more equity into the purchase they may not allow you to port the mortgage.
Example house £270,000 deposit £70,000 and mortgage £200,000 therefore LTV under 75%
New house £360,000 deposit £90,000 (25%) and ported mortgages £200,000 Plus £70,000 new mortgage
This depends on your income and Santander lending criteria.

sitesafe

I'm in similar situation part way through a 5 y fix with Santander. I believe it meant I'd port my existing rate and balance and any extra I wanted would be on a different rate which would mean paying two loans at the same time which obviously meant a more expensive overall monthly payment. I'm considering paying the erc and getting a new product instead.

TrickyDicky101

sitesafe wrote: »

I'm in similar situation part way through a 5 y fix with Santander. I believe it meant I'd port my existing rate and balance and any extra I wanted would be on a different rate which would mean paying two loans at the same time which obviously meant a more expensive overall monthly payment. I'm considering paying the erc and getting a new product instead.

Surely that depends on what your existing rate is, what any additional top up rate would be, and what alternative new product rates are available out in the market?

sitesafe

sitesafe wrote: »

I'm in similar situation part way through a 5 y fix with Santander. I believe it meant I'd port my existing rate and balance and any extra I wanted would be on a different rate which would mean paying two loans at the same time which obviously meant a more expensive overall monthly payment. I'm considering paying the erc and getting a new product instead.

TrickyDicky101 wrote: »

Surely that depends on what your existing rate is, what any additional top up rate would be, and what alternative new product rates are available out in the market?

Well of course. I rang Santander and was told of rates available on that day, I'm due to see a broker to see what else is available and will then decide what is the best option.

SpiraliS

Thrugelmir said:

SpiraliS wrote: »

Or does the existing mortgage stay untouched and Santander give me a 2nd mortgage at a completely different rate? Can you even have 2 mortgages on one property?

This is the principle. The existing loan is transferred to the new property. Any new borrowing will be a separate loan in the form of a mortgage product currently available to you.

There is only one mortgage on a property. As this is the legal charge placed by the lender to secure the total debt owed. You'll have two loans / sub accounts to finance the purchase of the new property.

Sorry to respark an old thread but now I’ve finally moved house I thought I’d let you know what happened. 

Thrugelmir was exactly right. The existing Santander loan simply ported over to the new property at its existing rate and terms, even though it was mid-way through its fix. Then Santander created a new loan at a different rate and different fix.

I tried to make the new loan finish at the same time as the other one By choosing a shorter fix in the hope I could merge the two loans some day, but actually it is difficult to do and anyway it doesn’t matter as they make it very clear when the statement comes through. 

I do make a small overpayment every month and Santander asked which loan should the overpayment apply to. Obviously I chose the loan that has the slightly higher rate! Thanks for everyone’s replies, most helpful.

Carl2510

SpiraliS said:

Thrugelmir said:

SpiraliS wrote: »

Or does the existing mortgage stay untouched and Santander give me a 2nd mortgage at a completely different rate? Can you even have 2 mortgages on one property?

This is the principle. The existing loan is transferred to the new property. Any new borrowing will be a separate loan in the form of a mortgage product currently available to you.

There is only one mortgage on a property. As this is the legal charge placed by the lender to secure the total debt owed. You'll have two loans / sub accounts to finance the purchase of the new property.

Sorry to respark an old thread but now I’ve finally moved house I thought I’d let you know what happened. 

Thrugelmir was exactly right. The existing Santander loan simply ported over to the new property at its existing rate and terms, even though it was mid-way through its fix. Then Santander created a new loan at a different rate and different fix.

I tried to make the new loan finish at the same time as the other one By choosing a shorter fix in the hope I could merge the two loans some day, but actually it is difficult to do and anyway it doesn’t matter as they make it very clear when the statement comes through. 

I do make a small overpayment every month and Santander asked which loan should the overpayment apply to. Obviously I chose the loan that has the slightly higher rate! Thanks for everyone’s replies, most helpful.

What did you end up selling your house for?