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Porting mortgage to a more expensive property.

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Last year my partner & I bought a flat & due to the fall out from the disastrous budget & the fact we were expecting our first baby, & my partner’s job situation was insecure, we took out a 5 year fix (at 3.5% through the Halifax).

Since then we’ve got better jobs & have realised we can afford to live in a much nicer area, so would like to move to a bigger property.

However we still have 4 years left on our fixed mortgage.

After overpaying the maximum 20% of our mortgage (over 2 calendar years) we still have £80k left on a 19 year term, with about £45k in equity.

Ideally we’d like to move to a home costing approximately £200/250k, with a deposit of around 50k. So roughly doubling our mortgage amount.

If we sold without porting we’d face a 4% charge so approximately £3000.

Is it possible to port our existing mortgage onto a new property & take out a second mortgage or extend the mortgage amount?

Or do we just have to suck up the early repayment charge?


Comments

  • amnblog
    amnblog Posts: 12,727 Forumite
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    You do not have to suck up the early repayment charge. You port the product you have to the new mortgage with Halifax (at the current level of borrowing), and top up the extra you need on a new product with the same lender.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • amnblog said:
    You do not have to suck up the early repayment charge. You port the product you have to the new mortgage with Halifax (at the current level of borrowing), and top up the extra you need on a new product with the same lender.
    That’s great thank you.

    presumably would not be able to use the equity in the flat at present as a deposit on a new mortgage product however?
  • silvercar
    silvercar Posts: 49,504 Ambassador
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    amnblog said:
    You do not have to suck up the early repayment charge. You port the product you have to the new mortgage with Halifax (at the current level of borrowing), and top up the extra you need on a new product with the same lender.
    That’s great thank you.

    presumably would not be able to use the equity in the flat at present as a deposit on a new mortgage product however?
    Yes you would. The difference between the sale price and the current mortgage is your deposit on the new place. You then port the mortgage you have plus a new mortgage with the same lender. So your new mortgage will have 2 parts. Ideally you want your new deal to end at the same time as the current one, so that at some point you can combine them which gives you more options if you want to move lender.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • kingstreet
    kingstreet Posts: 39,254 Forumite
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    You apply for a new mortgage for the full amount you need to borrow.

    When your current property is sold and the mortgage repaid, the solicitor handling your sale and purchase has the residual funds, your equity, in his /her hands to put with the new mortgage money to make up the new purchase funds.

    Meanwhile, your new mortgage will have two parts, one for the earlier mortgage amount using the old product and another for the increased borrowing on the new rate.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • You apply for a new mortgage for the full amount you need to borrow.

    When your current property is sold and the mortgage repaid, the solicitor handling your sale and purchase has the residual funds, your equity, in his /her hands to put with the new mortgage money to make up the new purchase funds.

    Meanwhile, your new mortgage will have two parts, one for the earlier mortgage amount using the old product and another for the increased borrowing on the new rate.
    That sounds perfect, thank you very much! 
  • Altior
    Altior Posts: 1,009 Forumite
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    I read the OP four times, and I still can't work out how they lost out due to the 'disastrous' budget'.

    I thought that Halifax mortgage interest rates for 5 year fixes were already higher than 3.5% by the end of September 2022.

    Anyone confirm? 
  • Altior said:
    I read the OP four times, and I still can't work out how they lost out due to the 'disastrous' budget'.

    I thought that Halifax mortgage interest rates for 5 year fixes were already higher than 3.5% by the end of September 2022.

    Anyone confirm? 
    Best I can find at short hand:

    https://www.ftadviser.com/mortgages/2022/06/23/halifax-latest-lender-to-hike-mortgage-rates/
  • Altior
    Altior Posts: 1,009 Forumite
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    Thanks, I found this but it's not ftb. But I'm reasonably sure that sub 4% was gone from the market long before the media and commentators went to town on the 'mini' budget (and more pertinently, the Fed hiked unexpectedly and foretold of worse to come).

    Halifax lifts rates on its two and five remortgage products by up to 26 basis points today (1 September).

    Key changes among five-year products include a five-year repayment and interest-only loan at up to 60% LTV up by 23 bps to 4.07%, with no fee. Available between £25,000 and £1m.

    A five-year repayment-only offer between 80% LTV and 85% LTV up by 20 bps to 4.19%, with no fee.  Available between £25,000 and £1m.

    And a five-year repayment-only deal between 85% LTV and 90% LTV up by 24 bps to 4.43%. Available between £25,000 and £750,000.

  • Bluebell1000
    Bluebell1000 Posts: 1,123 Forumite
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    It's worth checking that Halifax is willing to loan you the extra; we were offered porting with First Direct for the outstanding balance but they would not lend extra, so ended up having to change mortgage provider when we moved.
  • amnblog
    amnblog Posts: 12,727 Forumite
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    IMPORTANT

    When porting your existing product with Halifax make sure that when applying for the funds your Solicitor is clear with the Lender that a product is being ported.

    If the Solicitors are not clear with Halifax that a port is happening, we often see settlement figures for the existing mortgage produced with standard early repayment charges added in error. Then you have to mess around sorting it out.

    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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