Porting a mortgage and borrowing more

gabbro86

Hi all,

This might be a daft question, but I'd need some help, maybe from people who have gone through this already.
Let's say I have £300k balance outstanding on my mortgage and I sell my property for £600k. I want to buy another property for £1M and the bank lets me port my mortgage and borrow the £400k outstanding.
I know I'll most probably need another mortgage for the £400k, but what would its LTV be? 40% because it's for 400k out of 1M, or 70%, because the pre-existing 300k need to be taken into consideration?

Thanks in advance for your answers.

Hoenir

70%. LTV is the total amount borrowed. Whether it be 1 or 5 or 10 loan accounts secured by the mortgage. 

gabbro86

Ha, that's what I thought, thank you 

gabbro86

Further question... would I be tied to the current lender for the second mortgage, or would I be free to go to someone else?

kingstreet

You will have only one first charge mortgage with the same lender and this will comprise different sub-accounts reflecting different lending at different times. To all intents this ties you to the current lender. You could take a second charge with a different lender but the rates make this prohibitive.