Barclays mortgage with 2 parts and different end dates

JJB51

Hello all,

Quick introduction we bought a new home in Sept 2019 on a 2 year fixed deal, this also included porting our previous mortgage that has left us with 2 mortages with different end dates as below:

Mortage 1 (old) - Balance £46500 at 1.84% - Term ends in April

Mortgage 2 (new) - Balance £135500 at 2.18% - Term ends Sept

Total balance - £182000

Our aim is to get to £172000 by Sept to take us to 80% LTV to unlock a better or similar rate as we are on now and combine both mortgages. However as the term for the old mortgage is coming to an end I am being asked to select a new rate on the old mortgage. Given we want to combine the mortgages we dont want to commit to another fix.

The mortgage rates on offer are quite poor and it doesnt show me any LTV requirements. The only rate available that is better than my current rate comes with an overkill application fee of £1749, obviously pointless on such a small balance.  The only mortgage available with 0 fees is a "EMC Reward 2Yr Tracker BEBR +2.35%(FT25)" this would put my payments up slightly but I assume in Sept I could leave this mortgage with no penalty and stick to our original plan?

As a second question we are on track to hit the 80% LTV balance in time for Sept. The house we bought is a new build and the prices have jumped considerably since we purchased. We paid £215 000 for a 3 bed detached house, the last ones to be sold recently with the same specification but semi detatched have sold for £230 000+ When remortgaging is that something that would be taken into account? May help us push towards 75% LTV if so.

Any advice whatsoever is greatly appreciated

Thrugelmir

In order to bring the sub accounts into line. You would need to drop onto the lenders SVR rate.  Might well be cheaper to take the lowest free rate product on offer. As SVR's are normally considerably higher. 

Lenders normally rely on indexation to arrive at LTV's. If you believe that it understates the value. Then you may have to pay for a formal valuation. House prices being subjective. 

getmore4less

How much earlier do Barclays let you switch, you can look from 90 days

They may not  combine the sub accounts but should let you switch both bits for a single fee.

that EMC Reward 2 Year Tracker  @ +2.35% has a 1% ERC
You need to get the +2.64%  £99 fee rate for  ERC free 

That will be a bit cheaper for the 5 months gap  than the follow on rate

https://www.barclays.co.uk/content/dam/documents/personal/mortgages/emcrewardcustomerratesheet.pdf

A_Random_Man

Does you current bank allow you to switch early some banks do a few months in advance, if they do you could potentially switch both loan parts when the later one is due for renewal of course depending on the bank this could mean going onto SVR or that banks equivalent. You would need to speak to your bank about the valuation as they may have an automatical valuation done which may be similar to your valuation 

JJB51

Thank you for all the responses. I think I can select my new rate 3 months in advance but it will only take effect when my mortgage term was due to expire. I am not too concerned with the ERC being free on the smaller mortgage as i am making all my overpayments on the larger account as it has the higher interest rate.

If I went onto that tracker for 5 months and then wanted to put them both together on a fixed term with no additional issues i think that may be the best option?

getmore4less

JJB51 said:

Thank you for all the responses. I think I can select my new rate 3 months in advance but it will only take effect when my mortgage term was due to expire. I am not too concerned with the ERC being free on the smaller mortgage as i am making all my overpayments on the larger account as it has the higher interest rate.

If I went onto that tracker for 5 months and then wanted to put them both together on a fixed term with no additional issues i think that may be the best option?

looks like you have 3 options
2.45%  £0 fee tracker 1% ERC if you switch in 5 months,  ~£400
2.74% £99  no ERC  on £45k ~£60 more interest
3.59%  no fee no EC  £162 extra interest over the £99 fee version

probably would have better to have been directing  your overpayments to the smaller bit as that will be a higher rate  than the 2.18% for 5months.