Moving Home - Mortgage advice

RyanIre

Looking some advice if possible folks.


We currently have a mortgage with Santander, a 2 year fixed at 1.99% which is due to elapse in November this year. Current mortgage left to pay is approx. 98k.


We are now seriously considering moving house that has a value of approx. 230k, we would have 60k deposit so a LTV of just under 75% if we went through with it - meaning a new mortgage of 170k required.


Would my best option be to port the remaining 98k with Santander at assuming the current 1.99 rate and basically take out the remaining 72k as a new loan with I assume a different rate or get a new mortgage altogether if I can get a lower rate than my current 1.99% with Santander?


Apologies for my lack of knowledge in the mortgage area!

Thrugelmir

If you switched mortgage lender and redeemed your current mortgage. What's the ERC you would incur? This cost needs to be factored into any decision.

RyanIre

Thrugelmir wrote: »

If you switched mortgage lender and redeemed your current mortgage. What's the ERC you would incur? This cost needs to be factored into any decision.

Hi see details below - I assume it probably doesn't make financial sense to transfer to a new mortgage provider given our ERC is nearly 3k


Early repayment charge:£2,957.09
Product end date:03/11/2018

MortgageMamma

RyanIre,


Has your property actually sold yet? I am asking because it could take a while to sell, and whilst it's waiting to sell you would be moving nearer and nearer the end of your Early repayment charges date.


Its quite possible to get a mortgage offer from a lender that will last a whole six months. So if you've not already sold that could be a consideration. Not every lender does this, they are usually three months or a bit longer for new builds.


If your property has already sold, the a porting of your existing mortgage would be a reasonable option. Bear in mind though it doesn't always work out due to lenders criteria such as affordability calculations and if the new property is deemed acceptable security.


If you choose to port your mortgage before the ERC end date, you should investigate taking the second portion of the loan on the lenders standard variable rate, then when the ERC has ended do a product transfer/switch and put both elements of the loan on one rate. Its good practice to do this as soon as you can so that future remortgaging isn't overly onerous or costly.


Hope that helps


MM

RyanIre

Thanks MortgageMama


No our house hasn't sold yet but we've had a few offers and fully expect us to accept an offer within the next 2 weeks.


In regards to switching the second portion of the loan to Santander's variable rate, which looks like it's 4.74%, would this mean we're effectively taking our a high rate than a fixed mortgage for a small period of time so we could consolidate our loans?


Also I assume we'd be able to product transfer/switch both loans to a new mortgage provider / bank once our fixed has expired in November?


Thanks again!