Porting mortgage and borrowing more with same lender

lukeurwin

Hi,

We currently have a £130,000 mortgage at a rate of 1.89% that was fixed for 2 years, ending on 31/01/2020.

We are in the process of purchasing a house of the value of £380,000 and require a £342,000 (90% LTV) mortgage.

I have spoken to London and Country who advised the best product for our requirements is a 2.29% mortgage with HSBC for the full amount fixed for 5 years. This would mean we would pay an early repayment charge to move away from our current lenders (Halifax) of £1,950. Their is a product fee of £999 with HSBC and the monthly payments with this added would be £1,502 over 25 years.

I spoke to our current lender who advised we have multiple options.
We could get a whole new mortgage with Halifax for a rate of 2.62% fixed for 5 years with a early repayment of £1,950 and a product fee of £1,495 meaning total repayments are £1,550 over 25 years.

OR, we could port our current £130,000 mortgage at the rate of 1.89%, get a new mortgage (so two sub accounts) for the remainder we require, again at a rate of 2.62%, with no early repayment charge but a product fee of £1,495 for the new sub mortgage, meaning total repayments are £1,470.

Having looked through this, it seems a good option is to port our current mortgage and get another sub mortgage with Halifax as it offers no early repayment charges and means the lowest monthly repayments, however I understand that in January next year when our fixed rate on the £130k finishes, we would have to secure a new deal and if the interest rate halifax offer then is more than 2.62% then it may of been better to move to HSBC now.

Questions;
1. In January if we want to secure a new deal for the £130k, can we add it to the current new mortgage and make them both end on the same date?
2. Have I thought this all through correctly?
3. What do people think the best option is and why?

Although I work in finance, this is a grey area for me so I would massively appreciate someone else's thoughts.

Thanks

kingstreet

No. The customer retention product will have a fixed end-date unlikely to match the other sub-account.

Possibly.

Speak to a broker for advice?

Gstrang81

We've recently ported our mortgage and borrowed more to buy a new property, also with Halifax. We took out a 5yr fixed rate in December then decided to move in January (foolish, I know!). We have taken our original fixed rate with us until Jan 24 and borrowed more at a slightly higher rate fixed until July 24. We'll go onto the SVR for a few months then remortgage the full balance onto one product. We may have got a cheaper rate with another provider but this saved us approx £3k in early repayment fees and it gives us comfort that we don't need to worry about rate changes etc for 5 years