Over complicated mortgage with Halifax?

Mizydoscape

We've had an offer accepted on a property and need a joint mortgage of £198,000. My property being is sold is in my name only and has £80,000 left on the mortgage. There is an early repayment charge of £1605 on my mortgage before January.

Our broker has suggested that we port my 80k mortgage with Halifax, add my partner and take out a second product in both names for the additional £118,000. Then in January we do a product transfer for another 5 year fix on the 80k. After 5 years, the 118k will expire first, we then have the 118k on a variable for a couple months until the 80k expires before remortgaging to cover the whole amount on 1 product.

This seems horribly complicated. Is there any benefit beyond saving the £1605 ERC on my mortgage?

Are there any pitfalls to this? What happens if in January, Halifax won't let me change my (will be our) 80k mortgage, will we be stuck on a variable for that part?

The other question is around term length. My 80k has about 27 years left but the 118k will be on 30 years. What happens with that when we want to remortgage to cover both?

Any advice would be great, thanks.

MovingForwards

Seems like a massive headache, for not much reward, especially with interest rates as they are at the moment.

Why wouldn't they let you pick another fixed rate?

When you remortgage you take a mortgage with a new lender and pay off the old mortgage(s). As part of the application process you pick your mortgage term. Provided your end ages are within the lenders criteria you can pick the longer of the two.

amnblog

This is standard practice in these situations.
The will be no question of your being able to get a new rate on the £80,000.
So it works and presumably is less expensive than paying the early redemption penalty.

Mizydoscape

Thanks both and glad to hear it's standard practice. Just getting my head around it all is a bit confusing that's all!

getmore4less

Fee/no fee can become an issue with split products at this level of borrowing.

It needs a proper number crunching on LTV  rates and fees.

Mizydoscape

Ooh good point @getmore4less so there is a £999 product fee on the first product. If the second product is the same then there's actually a smaller saving from the ERC

kingstreet

You wouldn't normally have two terms. Both sub-accounts would usually have the longer term, 30 years.

[Deleted User]

depending on how long it takes you to move you might be able to ditch the current fixed rate and take a new deal for the whole lot.   I cant remember off the top of my head what Halifax's policy is but some banks allow this with up to 6 months remaining on the ported part

Mizydoscape

@kingstreet OK that's where I'm confused then. So if we take the new product now on the new house for 118k at 30 years. When I do a product transfer in January on my current product (80k), which is being moved to the new property and having my partner added, we will have to take 30 years on that one as well?

Mizydoscape

Deleted_User said:

depending on how long it takes you to move you might be able to ditch the current fixed rate and take a new deal for the whole lot.   I cant remember off the top of my head what Halifax's policy is but some banks allow this with up to 6 months remaining on the ported part

We are aiming to complete by the end of September/beginning of October and my ERC ends on 31st January 2022.