To port or not to port and direct application or broker?

Mon2907

Good Morning! 

I know detail is important so I thought I’d include this first.

We’ve had an offer accepted on our property. We need to sell the property to raise our deposit. The property sale will give us 60k equity and in addition we have separate savings of 7k.

We first approached NatWest who are our current provider for bank accounts and mortgage to get an agreement in principle for a house we liked, this was to help inform our negotiations. We were given an agreement in principle based on our combined income (62k) and commitments (combined PCP of 540 and childcare of 500). This was based on a deposit of 55k. No adverse credit history and all credit files checked. They have informed us we can proceed with an application but I wanted to speak to a mortgage broker first.

Why did I want to speak to a mortgage broker?

1) We are considering porting our mortgage with NatWest, I wanted to weigh up the short term financial loss from the ERC (2k) against long term saving of a cheaper mortgage product elsewhere.
2) I wanted to see if there were more favourable lenders considering our circumstances - although our combined incomes are adequate, I acknowledge our commitments are embarrassing. We won’t be paying childcare from January onwards as we’ll be in receipt of the free childcare hours - would this be considered? E.g I know the criteria for NatWest is that if the childcare payments aren’t going to be present in 6 months they do not need to be included. 

The mortgage broker has checked lending amount with NatWest and the rates we would have if we ported our mortgage. This would save us 2k, however there was a cheaper product available with another lender which would save us 7k over the next five years (5k if taking into account the ERC). 

I’ve been advised to think about our options and how we went to proceed. Whether we continue making an application directly with NatWest or using a broker to apply for a new product. Our broker also informed us that we could use her instead of making the application directly with NatWest if needed - what are benefits of doing this? For me it would be the expertise, time saved and if we are rejected someone who knows our details in depth enough to find us another suitable lender. 

The other thing that made me nervous was that our broker said she was quite surprised at the amount NatWest had offered to lend us, even though she double checked this. She did advise that the offer could change dependant on further scrutiny of our finances once a complete application has been put in. I did wonder whether increasing the deposit to 56k to give us a LTV of 80% would make a difference? 

I feel like I’ve answered my own questions as I’ve gone along but any other perspectives etc would be useful! 

Thanks. 

getmore4less

lacking details like the lender, amount, rates offered, fees and term.


you need to check for both 80% and 85% if you are potentially on the cusp of LTV


eg   £225k on 30y full term at say 3% 
to save £7k over 5years needs a rate of around 2.4%  which is a 0.6% difference