Mortgage when moving

RobbieD1506

Hi,
just wanted some advice as a general starting point. We’re 2 years into a 5 year fixed mortgage atm. Looking to move to a new property where we may have to take out another 30k-ish. Do we keep our existing rate on the £220k we currently owe (1.6%) and just have to pay the higher rate on the new 30k? 

Thanks. 

prettyandfluffy

The mortgage is secured against the property you bought with it so you will pay off the mortgage and take out a new one against your new home.  You can ask your lender what the options are for porting your mortgage to the new property.

RobbieD1506

Thanks for commenting. So does that mean you’d have to take out a new mortgage for the whole amount at the new rate (6ish%)? 

user1977

RobbieD1506 said:

So does that mean you’d have to take out a new mortgage for the whole amount at the new rate (6ish%)? 

No, it means you might be able to carry over your current mortgage product, and get an additional loan at the current rate for the surplus. It depends whether your lender offers porting at all, and whether they're happy to offer you a new mortgage.

Yorkie1

Say your existing property has a mortgage on it at 3%, which is portable, and has £100,000 outstanding. You then want to move to a new property that will need a mortgage of £150,000 in total, with interest rates now being 5%. 

Assuming your lender agrees, when you sell property 1 and buy property 2, you pay off the £100K mortgage on property 1, and take out a mortgage on property 2 that has 2 elements: a) £100K at 3% (i.e. you have ported that rate on that balance), and b) the remaining £50K at 5%.

DigSunPap

When moving and taking out an additional mortgage on a new property, you can often keep your existing rate on the £220k balance and pay the higher rate on the new £30k. This will allow you to retain the favourable rate on the existing mortgage while adjusting the rate for the additional borrowing