Is porting our best option?

SimplyMum

We’ve only recently thought of selling/buying a new house and were in no rush until our dream home came up on RightMove. 

Going off Zoopla, if we can get the mid range estimate for ours and knock the other house down slightly we will need to borrow an extra £60-70k ish to cover the cost of the house and stamp duty. 

We are on a really good rate for our current mortgage, 1.6%, and have £145k left over 17 years. This is fixed for another 2 years and 2 months. Currently paying £819 a month. 

We’ve spoken to our mortgage company and they can port our mortgage but for it to be affordable we’d need to stretch it to the max of 28 years and 4 months which takes us to national retirement age. Fixed for 5 years the payment is £953 a month. They’ve given us a mortgage in principle.

With porting would the £145k still be paid off in 17 years and then we carry on paying the remaining of the £60-70k for the remaining 11 years or is it all combined as 1 and the whole amount has been stretched to 28 years? 

If they are combined is it worth us keeping the current mortgage and getting a second mortgage for the £60-70k and stretching that mortgage out longer so after the 17 years we would only have the smaller mortgage payments to make? 

Stretching to 28 years is making us feel a little uncomfortable in all honesty! Our first mortgage in 2020 was over 34 years due to the high rates. When we remortgaged in 2022 we managed to get it down to 20 years. 

We have no debt. Credit rating excellent. We do having some savings but it is for our upcoming wedding. Following our wedding we will have an extra £500 a month disposable income. 

Do we take the 28 years and then following our wedding overpay each month ready for when our fixed term ends? Aiming to reduce what we owe and bringing the term down? 

Are there any other options that we’ve maybe not thought of? 

Thank you in advance. X

ACG

You need to speak to the lender to see what they have recommended. I suspect it is the full amount over the longer term.

Most lenders will allow you to overpay, so if you are able to pay a higher amount you probably can and that will reduce the term. 

Hoenir

Without changing the term on your existing mortgage. In two years time you'll owe around 130k. At a 4% interest rate the monthly payment would rise to £953 on this basis.  

The additional 70k over a 28 year term would be an additional £347 a month at a 4% interest rate. 

You are currently paying £819. In 2 years time you could be paying £1,300 (953 +347).  That £500 of disposal income you currently have would be wiped at a stroke. 

Once the Wedding has past. Perhaps focus on saving for a while. Rather than over stretching yourselves financially. 

SimplyMum

We have a joint annual income of around £82k. We won’t be overstretched financially 🙂

It’s more the thought of having 28 years term 🙈

SimplyMum

Ideally we would rather save for a little longer but these houses don’t come up often in our village. After viewing it tomorrow, if it is as perfect as it appears to be we would like to make it work. We just want to make sure we do it right. 

eschaton

SimplyMum said:

Ideally we would rather save for a little longer but these houses don’t come up often in our village. After viewing it tomorrow, if it is as perfect as it appears to be we would like to make it work. We just want to make sure we do it right. 

If you earn that much what is the 28 years all about?

You should be able to pay off a mortgage for the full amount over much less years with that kind of income.  No?

SimplyMum

eschaton said:

SimplyMum said:

Ideally we would rather save for a little longer but these houses don’t come up often in our village. After viewing it tomorrow, if it is as perfect as it appears to be we would like to make it work. We just want to make sure we do it right. 

If you earn that much what is the 28 years all about?

You should be able to pay off a mortgage for the full amount over much less years with that kind of income.  No?

Because we would like to keep our mortgage payment to around that amount just so we don’t overstretch at any point. You never know what life will throw at you and like someone said above, when we renew our monthly payment is likely to increase.