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  • ERCs

    Lender might let you 'port' though. Depends on the figures involved and whether they would lend on the new property.

    These mortgages are portable. The only* fee would be an arrangement fee (£1k) for an additional mortgage to cover any difference.

    In case it's useful let's take an e.g.

    Current House = 400k
    Mortgage = 300k
    New House = 500k

    That means we'd need an extra 100k to buy New House.

    Potential issues I see:

    1. Affordability criteria - we're no longer suitable to repay 400k (300+100) so they, nor anyone else will lend us the 100k. But if we're moving in year 3 or 4 we should know this and then wouldn't bother moving.
    2. Valuation - New House ≠ 500k and they won't port or lend the extra 100k. That is something we may not know until we're quite far down the road, and would prevent us from selling Current House before looking for New House... or thinking it through more, could they use this as an excuse to prevent us porting it? i.e. saying that New House is actually worth <300k

    *we think - hence me asking in case people have experienced any surprise fees.

  • We've just moved almost three years into a 5 year fix in a similar scenario to the one you outline. We've now got an additional 2 year fixed for the extra amount from the same lender, which is at a better rate than the 5. Plan is to go onto the variable rate for the ~3 months between the 5 and 2 year terms ending, and then consolidate them both.

    If we'd moved a few months later I think it would have made more sense to pay the ERC and get a better rate, but we moved when we did so ¯_(ツ)_/¯. Only other thing is they'd only give us the two year fix for a 35 year term, so the 5 year is now also on that rather than the 31 years it had left, but I don't really mind that. I don't think the lender charged any fees, but our mortgage advisor who dealt with it all charged a bit for the admin.

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