Advise Needed - Split mortgage?

MortgageHunter

We are needing some advice, as we will be moving in late March and I belive now is the time to secure a mortgage deal.

We currently have a £115k 21yrs left remaining mortgage with the Woolwich (was a 5 year fixed rate) and we have a tie in until 2009 (£3000 penalty).

We are looking to borrow a total of £250k. The Woolwich recommended continuing the current £115k mortgage and adding a top-up mortgage to complete the rest of the funds required. There is £999 setup fee with the new mortgage. We will need to take the top-up over 30 or 35 years although as we regularly get lump sums to have the option of a 10% overpayment.

What advise can you give us, as I have never heard of a split-mortgage before. It might get confusing with different mortgages deals running out at different times? Should we look to join the products together now or later? Or running a split mortgage is that ok?

We were thinking of a 5 year fixed rate as it helps with a bit of extra stability knowing what our payments are.

Conrad

A simple cost comparison of 2 split accounts against one account at one rate will answer your question.

Leon_W

It's probably best to try and tie in the end dates of the two mortgages as near as possible. That way you can pick the whole lot up and move to another lender if need be.

As your present mortgage is tied until 2009, it seems mad to me that you are contemplating taking a 5 year fix on the additional borrowing, as in 2009 your existing mortgage will be up for renewal and you'll be limited to Woolwich again because your new loan would be tied until 2012.

Perhaps look at a 2 or 3 year deal for the additional borrowing, whichever has an end date closest to your original loan. You'll have more options that way.