Moving an offset fixed to another property in the future a couple of questions

skysnapper

First direct have offered me a 10 year fixed offset mortgage with them.
I reckon I could pay this off in 6-7 years.
Once I have paid this off I intend to keep hold of the paid off property for rental and buy a new property to live in,
Now the rate for it is 5.39% which I think is still a very favourable rate, so wouldn't mind keeping it further down the line as I can’t see rates decreasing to that low there were several years back.
I just like the piece of mind knowing that I won’t be paying 6%+ in some year’s time.
Also means I won’t have the hassle of having to pay fees etc again for the final 2 years of my mortgage
Would there be fewer costs involved or more cost involved in using the same lender?
When they say you can port the amount over is that the remaining amount of the capital or could I borrow an additional amount at eg.3.5 time your salary at the rate of my current mortgage rate or re-mortgage against my old property.
Also my understanding of this mortgage is that once the capital is in your account you pay no interest.
So could I leave the account dormant if I had all the capital back in my account several years early, so as to avoid closing the account and incurring any redemption charges.
Could I get a mortgage with another lender if I still have an unclosed account although I have paid the capital back?

Thanks.

silvercar

The mortgage can only be secured on one property at a time.

So you could build up your savings until the mortgage was fully offset, then decide to port the mortgage to the new property. This would mean clearing the original mortgage with the savings pot and starting again on the new house with an empty pot.

Do bear in mind that a mortgage being portable just means that you can take the same deal to a new property provided you meet the lendlong criteria at that time. So they would have to do a valuation and you would have the same restrictions on loan to value and salary multiples. Also think where you will get the deposit from.

From a tax point of view the mortgage interest will be an allowable expense against rental income upto the value of the property when you first let it, irrespective of which home you have secured it.

skysnapper

silvercar wrote: »

So you could build up your savings until the mortgage was fully offset, then decide to port the mortgage to the new property. This would mean clearing the original mortgage with the savings pot and starting again on the new house with an empty pot.

Do bear in mind that a mortgage being portable just means that you can take the same deal to a new property provided you meet the lendlong criteria at that time. So they would have to do a valuation and you would have the same restrictions on loan to value and salary multiples. Also think where you will get the deposit from.

Hi thanks for your comments.

So to sum up providing I meet the lending criteria at the time e.g. loan value vs salary multiples and a deposit I could clear the balance of my original mortgage loan and borrow a new larger amount at the same rate, in effective a whole new mortgage on the my orignal terms.

silvercar wrote: »

The mortgage can only be secured on one property at a time.

That is what io gathered and i intend to pay the first capital in full for the original property before taking on a second.

But say i have the all the capital paid back for my original property so my mortgage account is so to speak dormant as I’m paying 0 interest as the total capital loan owed is now in my savings..
As another option should there be some far better mortgage deals at the time, could I leave the old account open so to avoid redemption charges and start a new mortgage with another lender?
Or can you not have more than one mortgage unless the other one is a buy to let. Even though my first property which I would then be letting, however all the capital owed is there in my account so effectively I owe nothing on the mortgage for it and am not paying interetst and the new one i will be living in so would be just a regular mortgage.

silvercar

But say i have the all the capital paid back for my original property so my mortgage account is so to speak dormant as I’m paying 0 interest as the total capital loan owed is now in my savings..

You can do that but legally the mortgage lender still has a charge on the property.

As another option should there be some far better mortgage deals at the time, could I leave the old account open so to avoid redemption charges and start a new mortgage with another lender?

Yes, though the new mortgage would need to be attached to the new property. The lender would need to be told that the old mortgage exists, even though it is offset. This would be to stop you taking the offset savings out and spending them and leaving yourself with two mortgages that you couldn't afford. If you were letting the old property, you would need to get consent to lease from the (old) lender.

Or can you not have more than one mortgage unless the other one is a buy to let.

You can as long as the lender agrees.

tinkerbell84

The 10 year FD mortgage is 5.49 not 5.39 (that's the 5 year)

skysnapper

silvercar wrote: »

You can do that but legally the mortgage lender still has a charge on the property.



Yes, though the new mortgage would need to be attached to the new property. The lender would need to be told that the old mortgage exists, even though it is offset. This would be to stop you taking the offset savings out and spending them and leaving yourself with two mortgages that you couldn't afford. If you were letting the old property, you would need to get consent to lease from the (old) lender.


You can as long as the lender agrees.

Ok cheers thats cleared a few things up.