How best to align mortgages

mobro123

Hi All,

We moved house in July last year and ported our existing mortgage of £150k (fixed until Feb 23 @ 1.94%) and took out an additional mortgage of £100k (fixed until July 2026 @1.54%).

I have a call with Nationwide in a few weeks as I want to get a mortgage offer before the rates rise again at end of the year and I want to line both mortgages up so I'm not paying 2x product fees. The rate is looking like 3.5% which is obviously a lot higher than current and a lot higher than the additional mortgage fixed until July 2026. 

I was thinking of doing a 3 year fix that would run until Feb 2026. I would then be within 6 months of July 2026 and can get an offer for the second mortgage. Given the offer rate is likely to be higher than the current 1.54% I might have to move to a more expensive rate but if I can merge both mortgages I'd only have to pay 1 set of product fees. Does this seem sensible? Am I missing anything? 

Thanks,
Matt

ACG

Im not sure about natiownide specifically, but most lenders 2/3/5 year deals are not exactly 24/36/60 months, so you might find a 3 year deal gets you very very close to your other deal. 

But they still might charge 2 x £999 fees if the deal has a £999 fee. When I worked for a certain "ethical" bank we used to have to manually waive one, but it was a faff and we were quite a small lender. You might need to remortgage away from them in order to marry the 2 up completely. But what you are suggesting is probably the easiest way to do it at least initially. 

mobro123

Thanks for the reply ACG. What is your view on fixing for 3 years so the mortgages would line up in 2026 as opposed to fixing for 5 years and going for a 2 year fix in 2026 to align the products? I know we don't have a crystal ball but I'd hope mortgage rates would be less than current by 2026!

ACG

I have OCD matey, so I would be doing the 3 year fix to tie them up. Thats not my professional advice, just personal because it would really bug me. 

Professionally, who knows? But as you say having them at 2 completely different times would likely mean 2 x £999 fees so what you gain there, you may lose with higher rates (but you might not). So hopefully not too much of a loss however you do it.