Tracker or another fixed rate mortgage?

DontBringBertie

Wondering what people’s views are…

We are in the process of moving house and will probably end up moving around September 2025.

Current mortgage is a 5 year fix at 1.49% which ends February 2027. The mortgage is portable.

The current mortgage has £113k left and we’d need to borrow another £140k more for the new property.

Option 1)

- Port over existing mortgage
- Take out a tracker mortgage for the additional £140k with the aim to consolidate the two in February 2027.

Option 2)

- Port over existing mortgage
- Take out a 2 or 5 year fix for the additional £140k. 

We’re leaning towards option 1 as it would avoid the hassle of two separate mortgages after Feb 2027. Although the fixed rate for option 2 would probably save money in the short term.

Hoenir

You'll have one mortgage with two seperate sub loan accounts. Far from uncommon. Base your decision on products available at the time. 

DontBringBertie

Hoenir said:

You'll have one mortgage with two seperate sub loan accounts. Far from uncommon. Base your decision on products available at the time. 

Thanks. Would that be true if the two mortgages were with different banks though?

MWT

DontBringBertie said:

Hoenir said:

You'll have one mortgage with two seperate sub loan accounts. Far from uncommon. Base your decision on products available at the time. 

Thanks. Would that be true if the two mortgages were with different banks though?

You are not taking your old mortgage with you when you port, you are just moving the terms of that mortgage onto part of your new mortgage for the new property, so it is still one new mortgage with two parts.

So you don't move the old mortgage and then look around the market for another mortgage for the balance, you are going to be applying to your current lender for a new mortgage which will let you port the terms of the old one to part of the balance of the new mortgage, that would be your 1st option, or for a second option you don't port the terms of your current loan at all, you pay it off and get a new mortgage with a different lender as part of the sale/purchase as you move house.

The second option is usually less preferable as you will probably incur an early repayment charge on your current mortgage and the new rate will of course be higher than the rate you currently pay on your existing mortgage.