Mortage Port and additional loan question

AceT

I am currently on a 5yr fixed mortgage at 2.09% due to end Aug 2023 with Santander and have around £140k remaining on it. I am thinking of moving out later this year and into a house where an additional loan will be required. There is an ERC of around £7k.
I understand I can port the mortgage across to a new home and apply for additional funds to cover the gap. Would this be the best option and would this mean they both end in Aug 2023 ?
They said there is a 3 month period in which the port could take place which I don't understand. Does this mean I could sell the existing property and do the port later as I can always move to my parents if I don't find a property once I have an offer ?
Are there any other options to consider ?
What order should I do things in as I want to sell my current property in the July/August window if possible ? e.g. Contact existing mortgage provider, list property for sale etc. ?

Thrugelmir

You have 3 months from the date of redeeming your current mortgage in which to port the product. 
The minute you complete i.e. sell your existing property the clock will be ticking. 

Dee_FTB

I am in the same situation right now with Santander. If I don't complete on the sale and purchase on the same day then I have to pay the ERC and fees as the loan will be redeemed, if I then complete on the purchase within 90 days they will refund the ERC, failure to complete in 90 days means you lose the money paid for ERC and you are free to use any lender you want.

AceT

With Santander, can you still find a property after you’ve sold (within 3 months) to get the ERC refunded or do you have to had made an offer on a property ?

I’m wondering if paying the ERC, breaking the chain (as I’m currently renting elsewhere) and taking a new deal elsewhere would be more cost effective over the next 12 years ?

dwsjarcmcd

AceT said:

I understand I can port the mortgage across to a new home and apply for additional funds to cover the gap. Would this be the best option and would this mean they both end in Aug 2023 ?

You need to be careful here because unless you move to Santander's SVR, or find another product with an end date around August 2023 (by no means impossible) for your additional lending, you could end up with ERC's which are difficult to get rid of. So for example, say your additional loan is until 2025, then you may have ERC's on that element until then and in August 23 when your main product (and ERC's) end you're still left with ERC's on the one that runs to 2025. If you can't match them exactly, then get them as close as possible, even if that means paying a little more on the rate, then when all the ERC's end, you can align the mortgage with Santander or re-mortgage elsewhere.

Dee_FTB

AceT said:

With Santander, can you still find a property after you’ve sold (within 3 months) to get the ERC refunded or do you have to had made an offer on a property ?

I’m wondering if paying the ERC, breaking the chain (as I’m currently renting elsewhere) and taking a new deal elsewhere would be more cost effective over the next 12 years ?

As long as you complete on the new property within the 3 months you get the refund.