Can we remortgage our top up mortgage to a different lender?

littlecactus

Hello. I am hoping someone can help with this query. 

We have a main mortgage (circa £200,000) and a top-up mortgage (circa £45,000). The main mortgage is fixed at 2% interest until early 2026. The top-up is fixed at 3% until late 2024, and looks set to go onto 8% interest at this point, on the variable rate. 

We are therefore currently looking at options for our top-up mortgage when the fixed rate expires. 

Above all we are keen to understand if the top-up part of the mortgage can be remortgaged to another provider? Or whether our only option is to remortgage it with our current provider who also lent the main mortgage?

We’re keen to establish this as we’re about to pay a mortgage advisor a not inconsiderable sum to give us advice - but we think that if our options are fairly limited (fix with current provider or go onto variable rate), this might not be a necessary expense. The advisor will also calculate for us if we’re better long term to buy out of the main mortgage to align both with a new lender - but we can’t see this being a likely better option given the main mortgage is currently on 2% and there’s nothing available near that currently. 

As a secondary concern, while we don’t want to go onto the 8% variable rate, we think our only fix options will be for 2 or more years. This also concerns us, as it will mean the main mortgage will end its fixed rate circa 8 months before the re-fixed top-up. And given this mortgage is 4 times larger, if variable rates are anything like those currently then this feels financially much worse than even 18 months on the 8% rate for the top-up. 

Basically, we are keen to understand options to know the level and extent of mortgage advice we really need or can benefit from. 

Many thanks. 

Hoenir

littlecactus said:

Above all we are keen to understand if the top-up part of the mortgage can be remortgaged to another provider? Or whether our only option is to remortgage it with our current provider who also lent the main mortgage?

We’re keen to establish this as we’re about to pay a mortgage advisor a not inconsiderable sum to give us advice - but we think that if our options are fairly limited (fix with current provider or go onto variable rate), this might not be a necessary expense. The advisor will also calculate for us if we’re better long term to buy out of the main mortgage to align both with a new lender - but we can’t see this being a likely better option given the main mortgage is currently on 2% and there’s nothing available near that currently. 

As a secondary concern, while we don’t want to go onto the 8% variable rate, we think our only fix options will be for 2 or more years. This also concerns us, as it will mean the main mortgage will end its fixed rate circa 8 months before the re-fixed top-up. And given this mortgage is 4 times larger, if variable rates are anything like those currently then this feels financially much worse than even 18 months on the 8% rate for the top-up. 

Basically, we are keen to understand options to know the level and extent of mortgage advice we really need or can benefit from. 

Many thanks. 

You have one mortgage and two sub loan accounts linked to it.  No mainstream lender is likely to accept being a second charge mortgage holder. 

Your options given the circumstances are to either fix or go onto the SVR.  Makes no sense to exit a 2% deal. Not unusual to operate multiple sub loan accounts under a mortgage. 

littlecactus

Hoenir said:

littlecactus said:

Above all we are keen to understand if the top-up part of the mortgage can be remortgaged to another provider? Or whether our only option is to remortgage it with our current provider who also lent the main mortgage?

We’re keen to establish this as we’re about to pay a mortgage advisor a not inconsiderable sum to give us advice - but we think that if our options are fairly limited (fix with current provider or go onto variable rate), this might not be a necessary expense. The advisor will also calculate for us if we’re better long term to buy out of the main mortgage to align both with a new lender - but we can’t see this being a likely better option given the main mortgage is currently on 2% and there’s nothing available near that currently. 

As a secondary concern, while we don’t want to go onto the 8% variable rate, we think our only fix options will be for 2 or more years. This also concerns us, as it will mean the main mortgage will end its fixed rate circa 8 months before the re-fixed top-up. And given this mortgage is 4 times larger, if variable rates are anything like those currently then this feels financially much worse than even 18 months on the 8% rate for the top-up. 

Basically, we are keen to understand options to know the level and extent of mortgage advice we really need or can benefit from. 

Many thanks. 

You have one mortgage and two sub loan accounts linked to it.  No mainstream lender is likely to accept being a second charge mortgage holder. 

Your options given the circumstances are to either fix or go onto the SVR.  Makes no sense to exit a 2% deal. Not unusual to operate multiple sub loan accounts under a mortgage. 

Thank you. This is incredibly helpful. 

I think our main reasons for wanting to ultimately align the two into one mortgage is to give us more remortgage options when the larger sum fixed rate ends in early 2026. As our understanding is that we otherwise have to wait with one of the mortgage parts on SVR at some point, or never leave our current lender? We don’t find them massively brilliant, and so were keen to at least have the option of moving before too long, not least in case there are better rates out there. 

penners324

Just see what your mortgage company offer. No need to get a broker to do it.

Why are you paying a mortgage broker a big fee for this? Many work on commission only

littlecactus

penners324 said:

Just see what your mortgage company offer. No need to get a broker to do it.

Why are you paying a mortgage broker a big fee for this? Many work on commission only

Thank you. 

It’s the broker we used when buying the house who got back in touch when the top-up was due for remortgaging. We’re not super savvy on these things and so it seemed like a good place to start. We haven’t actually agreed to use them yet. 

I know this is straying into financial advice others can't give, but how worried should we be about aligning both mortgages so we can access potentially better future deals with other lenders by remortgaging all in one block, vs just getting a better current deal than SVR? Eg we could take a two year fix, for circa 4.7%, I think. But this ties our hands when the larger part of the mortgage comes up for re-fixing in early 2026, as the top-up smaller amount will be fixed till late 2026. 

Hoenir

littlecactus said:

penners324 said:

Just see what your mortgage company offer. No need to get a broker to do it.

Why are you paying a mortgage broker a big fee for this? Many work on commission only

but how worried should we be about aligning both mortgages so we can access potentially better future deals with other lenders by remortgaging all in one block,

Personally I've always taken the approach of taking the best option at the time. Rather than attempting to second guess future events. Moving to SVR for any length of time is likely to negate any benefits of an overall cheaper deal. Future direction of mortgage interest rates is totally unknown. All the speculation to date has proved to be meaningless. The hope of a return to the 2008-2022 era is sadly misplaced. 

BarelySentientAI

littlecactus said:

Hoenir said:

littlecactus said:

Above all we are keen to understand if the top-up part of the mortgage can be remortgaged to another provider? Or whether our only option is to remortgage it with our current provider who also lent the main mortgage?

We’re keen to establish this as we’re about to pay a mortgage advisor a not inconsiderable sum to give us advice - but we think that if our options are fairly limited (fix with current provider or go onto variable rate), this might not be a necessary expense. The advisor will also calculate for us if we’re better long term to buy out of the main mortgage to align both with a new lender - but we can’t see this being a likely better option given the main mortgage is currently on 2% and there’s nothing available near that currently. 

As a secondary concern, while we don’t want to go onto the 8% variable rate, we think our only fix options will be for 2 or more years. This also concerns us, as it will mean the main mortgage will end its fixed rate circa 8 months before the re-fixed top-up. And given this mortgage is 4 times larger, if variable rates are anything like those currently then this feels financially much worse than even 18 months on the 8% rate for the top-up. 

Basically, we are keen to understand options to know the level and extent of mortgage advice we really need or can benefit from. 

Many thanks. 

You have one mortgage and two sub loan accounts linked to it.  No mainstream lender is likely to accept being a second charge mortgage holder. 

Your options given the circumstances are to either fix or go onto the SVR.  Makes no sense to exit a 2% deal. Not unusual to operate multiple sub loan accounts under a mortgage. 

Thank you. This is incredibly helpful. 

I think our main reasons for wanting to ultimately align the two into one mortgage is to give us more remortgage options when the larger sum fixed rate ends in early 2026. As our understanding is that we otherwise have to wait with one of the mortgage parts on SVR at some point, or never leave our current lender? We don’t find them massively brilliant, and so were keen to at least have the option of moving before too long, not least in case there are better rates out there. 

Or you pay the ERC on the part that is still in a fixed deal.  If that's a small part and/or only a short time left on the fix, that might be worth it if you find a better rate.

You are not stuck with your current lender, but you will need to move both parts.

kingstreet

Does your lender offer a one year fixed retention product? This would enable you to bring the two sub accounts closer together limiting the time needed on standard rate on the smaller tranche of borrowing while you await the expiry of the larger element.

Yorkie1

Would there be a possibility of going onto a tracker for the top up element? Or are the only options SVR or another fix? Trackers often don't have exit fees, so it could tide you over until the main fix ends, if the interest rate for the fix isn't sky high?