Remortgaging & porting questions

thriftypatos

We remortgaged in December 2019, choosing a 2y fixed rate deal.

We are now looking to move (probably spring/summer) and will port our current rate and balance (1.59% on 340k).

We need to borrow a further 290k and have an AIP for that. 

We would like to fix the futher 290k for 5y on a current deal with the same bank (1.79%). Ideally we'd do a 5y fix for the full 630k but we can't exit the 2y deal without hefty early repayment charges.

We will forever have two separate "tranches" of loan/mortgage? When the 2y deal expires in December 2021, presumably we will then remortgage the remaining principal under that tranche (the 5y fix tranche will still have 3.5 years to run)? And if we later want to remortgage to finance an extension, how will that work?

Thanks!

kingstreet

Terminology first.
A new product from your existing lender is a customer retention product, not a remortgage.
A remortgage is a new mortgage from a new lender to repay the current mortgage/lender, possibly borrowing more.
Asking your current lender for more money is a further advance or additional borrowing.
Now, onto the issues.
You will have two tranches of borrowing and will be asking for customer retention products from your existing lender at different times until, at some point, you remortgage to a new lender. Achieving this may mean you spend some months on the lender's standard variable rate unless it has a product with no early repayment penalties you can choose until your other product catches up.
If you want to borrow more, you can go back to your current lender for a further advance adding a third tranche of borrowing to the mix, or you could look at a remortgage to a new lender where all the borrowing will be at the same rate.

thriftypatos

Thanks. Could you even argue that it's a good idea to have a bunch of different tranches? Call it a hedging strategy

kingstreet

You could argue that...

Thrugelmir

thriftypatos said:

Thanks. Could you even argue that it's a good idea to have a bunch of different tranches? Call it a hedging strategy

If your lender doesn't offer competitive products in the future. Then the strategy backfires.