Port or new mortgage?

DiscoveryMan

Hi, 

Hoping for some advice which would be appreciated!

We are currently on a fixed rate offset mortgage (2.09%) until 01/10/24. We were planning on moving to a bigger house after this date, but our "dream home" came up on the market and we are in the process of buying it. It requires us to borrow ~£150k more, taking our LTV on the new property to 50%. FYI, the house we are moving to is our forever home, although it does need some money spent on it to modernise!! (Ready for weekends of DIY to come!)

I estimate we will complete on the purchase (+ sale of current home) in summer, agonisingly close to the fix end date. Our ERC will be around £1500. 

I was surprised on ringing my current mortgage lender that I can port over my existing rate and borrow the additional money I need at my current rate (i.e. 2.09% to October, then their SVR). 

It gives me 2x options:

1. Move to new lender when moving home and pay ERC. (NB - my current lender has no "competitive" rates to do a remortgage to and I would be best to pay the ERC to move to a different lender on better rate)
2. Port over existing mortgage, borrowing more with current lender. Then aim to remortgage on 01/10/24. 

The positive of number 2 would be saving £1500 on the ERC, and potentially getting a better rate IF rates go down this year. However, one risk I can think of is getting stuck on our current lenders SVR if we cannot remortgage to a better rate. Based on this I had a few questions I was hoping could be answered if anyone has had a similar experience or knowledge

a) Will our credit scores (currently Very Good / Excellent on TransUnion) be impacted to hamper our remortgage, if we i) go through application to port and borrow more with current lender and ii) move house and therefore not on electoral role?
I know this site mentions often not to setup credit cards, for example, before a mortgage application - but does the same apply for having a recent additional mortgage borrowing (even when the 2nd mortgage application will be replacing the first!) ?

b) I know you can "Lock in" a mortgage 6months prior. Would we be able to "remortgage" to set up a new deal to start on 01/10/24 before we even complete on the purchase?

c) Any thoughts on other fees (e.g. solicitors) when choosing option 2? Could that negate the savings on the ERC? 


Once I understand the above a little more, I plan on also asking a mortgage advisor. 

Thanks!
DiscoveryMan

Hoenir

There's always the risk that lending rates might actually rise higher. 

Out of curiosity what do you regards as a competitive rate ? 

amnblog

Who is the current Lender?

DiscoveryMan

Currently with Coventry Building Society - and by not competitive I mean that the rates with CBS are overall worse off (over 2/5 years) vs. moving to a new lender + paying the ERC