Mortgage porting, will we loose the intrest we have recently paid

Pippaslongstockings

We are porting our current mortgage to a new property.

Our broker submitted an application to port an amount of 198k (what we had left on our mortgage in January when we applied) and then we are getting a top up mortgage at a different rate.

We are still waiting to move and as such we have made multiple payments to the mortgage, roughly £1k per month. When we move will we get a full credit of the 5 months payments (5k) or only what our capital has reduced by? 

The latter doesn't seem fair as they are extending our term and upping to a mortgage amount we have already paid intrest on?

BarelySentientAI

When you port a mortgage, you aren't moving the loan.

You are paying off the old mortgage on the old property and then taking out a new one on the new property, but moving ("porting") the terms and conditions onto the new mortgage.

The balance of your old mortgage when you pay it off will be less than 198k.  Nothing has gone missing.

Actually, if they let you have 198k at the old rates (which I'm guessing are cheaper than the top up?) then that would be good for you because you will need less top-up.

I'm a bit confused by what you are calling "full credit" though - you still have to pay the interest on the mortgage at the moment so the balance isn't going down by 1k per month.

Pippaslongstockings

BarelySentientAI said:

When you port a mortgage, you aren't moving the loan.

You are paying off the old mortgage on the old property and then taking out a new one on the new property, but moving ("porting") the terms and conditions onto the new mortgage.

The balance of your old mortgage when you pay it off will be less than 198k.  Nothing has gone missing.

Actually, if they let you have 198k at the old rates (which I'm guessing are cheaper than the top up?) then that would be good for you because you will need less top-up.

I'm a bit confused by what you are calling "full credit" though - you still have to pay the interest on the mortgage at the moment so the balance isn't going down by 1k per month.

OK, yeah thank you.

My question is quite hard to articulate. By credit I mean how much the off set will be I.e. How much surplus there will be when we complete.

If we applied now we would be asking for less as our mortgage has had 4 months worth of payment since.

Basically we pay 1k a month a loose 500 in intrest. When we complete they are giving us 198k loan again even though we now only have a mortage of 196.5k so we have already paid intrest on that 198k. Will we only get back the capital repayment even though we do not need a loan the size they are providing.

It's so hard to explain, sorry

kingstreet

Whatever you pay off your mortgage will be reflected in more of the sale price of your current home belonging to you and resulting in a higher "deposit" amount for the next purchase; or those surplus funds being paid to you by your solicitor.

BarelySentientAI

Pippaslongstockings said:

BarelySentientAI said:

When you port a mortgage, you aren't moving the loan.

You are paying off the old mortgage on the old property and then taking out a new one on the new property, but moving ("porting") the terms and conditions onto the new mortgage.

The balance of your old mortgage when you pay it off will be less than 198k.  Nothing has gone missing.

Actually, if they let you have 198k at the old rates (which I'm guessing are cheaper than the top up?) then that would be good for you because you will need less top-up.

I'm a bit confused by what you are calling "full credit" though - you still have to pay the interest on the mortgage at the moment so the balance isn't going down by 1k per month.

OK, yeah thank you.

My question is quite hard to articulate. By credit I mean how much the off set will be I.e. How much surplus there will be when we complete.

If we applied now we would be asking for less as our mortgage has had 4 months worth of payment since.

Basically we pay 1k a month a loose 500 in intrest. When we complete they are giving us 198k loan again even though we now only have a mortage of 196.5k so we have already paid intrest on that 198k. Will we only get back the capital repayment even though we do not need a loan the size they are providing.

It's so hard to explain, sorry

That will be good for you if it's true (because I think your top-up mortgage part will be at higher interest).

Lets pick some random numbers to compare.  I'll just assume you are selling for 250k and buying for 300k - change the numbers to fit you.  And I'll assume you complete tomorrow with no extra payments made.

You will pay back the 196.5k when you sell, leaving you with 53.5k in cash.

If they will give you 198k at the old rate, plus your 53.5k cash, means you need a top up of only 48.5k.

If they will give you 196.5k at the old rate (which is what you seem to want), plus your 53.5k cash, means you need a top up of 50k.

You're not losing any "credit" anywhere.