Two people with two properties

Limey442

Good afternoon Everyone

i was hoping to get some advice please

i currently own a property with my previous partner and am trying to assess options. My current fixed term mortgage ends in 9 months. 

My new partner also owns a property herself and has 4 years left on her fixed term mortgage. Is there anyway in which she can sell her house, live with me and not have to incur the significant cost to break her mortgage? That is currently the
blocker as the costs to exit the mortgage would be £5k+. 

I.e can she port the mortgage over or something similar? We are both currently with the same mortgage provider which is nationwide.

Thanks in advance for advice. 

BikingBud

Bear in mind that that it appears to be large lump sum £5k+ but there will normally be an offset.

Paying off 4 years early means you are not borrowing the funds for the next 4 years so how much interest will be saved, it might make the decision more palatable.

You will only know the cost and saving if you ask for a settlement figure?

Hoenir

Limey442 said:

My new partner also owns a property herself and has 4 years left on her fixed term mortgage. Is there anyway in which she can sell her house, live with me and not have to incur the significant cost to break her mortgage? That is currently the
blocker as the costs to exit the mortgage would be £5k+. 

How much will be saved by owning just one property rather than two though ?  

kingstreet

Nationwide only permits porting in purchase situations;-

• Products can only be ported on home mover or second property home mover applications.

Limey442

BikingBud said:

Bear in mind that that it appears to be large lump sum £5k+ but there will normally be an offset.

Paying off 4 years early means you are not borrowing the funds for the next 4 years so how much interest will be saved, it might make the decision more palatable.

You will only know the cost and saving if you ask for a settlement figure?

Ok this makes a lot of sense. So say for example the exit cost is £6k and we have 3 years left. If the interest repayment on the mortgage is £300 per month (£10k in total) then we are actually better off through this decision? 

BikingBud

Yes, in essence the ERC is the compensation for interest the lender will not receive as you have paid some or all of the capital back early.

An excellent resource: Index.html download and have a play to understand your current mortgage. Perhaps put your details in and ensure that the figures it produces match your annual statements to ensure the model is correct.

Once you've had a play and understand how the changes affect the repayment profile you should be able to see the interest remaining over a period to the end of the fixed rate term and you should compare this with the settlement figure that your lender provides.

There will likely be slight differences to the figures from the model because it cannot emulate exactly how your lender might apply payments and the day of the month on which you pay. My monthly interest calculation is consistently out by only £0.01, compared with online figure in the Santander mortgage app. There is an earlier running discrepancy as the date of some overpayments was mid month so that might also drive out the running error. Either way an error of far less than a beer against a mortgage is not worth worrying about.