Remove ads

Introducing the LemonFools Personal Finance Calculators

Porting & Extending an Offset Mortgage - Easy to do?

moorfield
Lemon Quarter
Posts: 1162
Joined: November 7th, 2016, 1:56 pm
Has thanked: 158 times
Been thanked: 249 times

Porting & Extending an Offset Mortgage - Easy to do?

#92296

Postby moorfield » November 1st, 2017, 12:39 pm

Hello I'd be very grateful if any LFs who have done this recently can share any experience and/or advice on how difficult porting and extending an offset mortgage can be. We purchased Moorfield Towers 10 years ago (pre-credit crunch) and are looking to move next year (not necessarily to a larger house, but certainly to a more convenient location for the secondary school/6th form/university routine over the next 10 years).

The financial situation is currently:

Loan To Value (Offset Credit Limit/Estimated Sale Price) = 50%
Net Equity (Estimated Sale Price - Offset Credit Limit + Savings) > £500,000

Now, we want to port (the small print indicates we can) and extend the mortgage such that these numbers remain the same, ie:

Loan To Value (Extended Credit Limit/Target Offer Price) = 50%
Net Equity (Target Offer Price - Extended Credit Limit) > £500,000

... but note with current savings used to fund the move.

The new credit limit would increase by about 1.5x and be about 6.4x salary.

Bonkers? Or Feasible?

Many Thanks
M

pochisoldi
Lemon Slice
Posts: 312
Joined: November 4th, 2016, 11:33 am
Has thanked: 5 times
Been thanked: 152 times

Re: Porting & Extending an Offset Mortgage - Easy to do?

#92353

Postby pochisoldi » November 1st, 2017, 2:51 pm

This doesn't directly answer your question, but here goes...

The ease of porting the mortgage will be directly proportional to how high the current mortgage rate is.

For example I wouldn't be surprised if my mortgage provider made it as difficult as possible to port my BoE+0.69%, 16years to go interest only mortgage. (not that I need to move any time soon)

PochiSoldi

moorfield
Lemon Quarter
Posts: 1162
Joined: November 7th, 2016, 1:56 pm
Has thanked: 158 times
Been thanked: 249 times

Re: Porting & Extending an Offset Mortgage - Easy to do?

#92370

Postby moorfield » November 1st, 2017, 3:49 pm

pochisoldi wrote:This doesn't directly answer your question, but here goes...

The ease of porting the mortgage will be directly proportional to how high the current mortgage rate is.

For example I wouldn't be surprised if my mortgage provider made it as difficult as possible to port my BoE+0.69%, 16years to go interest only mortgage. (not that I need to move any time soon)

PochiSoldi


Indeed - I'm paying +0.75% 15 years to go, so understandably I want to carry that on for as long as possible! I'll be speaking to a mortgage bod anyway in the new year which should answer my question for sure...

DiamondEcho
Lemon Quarter
Posts: 2612
Joined: November 4th, 2016, 3:39 pm
Has thanked: 1907 times
Been thanked: 373 times

Re: Porting & Extending an Offset Mortgage - Easy to do?

#96769

Postby DiamondEcho » November 18th, 2017, 5:10 pm

10 years left, BBR+0.39%. Got one medium-term home-move in mind and hope I can port the mortgage, just because I could pay it off, but at the same time it's simple to earn far more than 0.39% on the funds, so redeeming it makes little sense.

DrBunsenHoneydew
Lemon Slice
Posts: 386
Joined: November 10th, 2016, 10:04 am
Has thanked: 28 times
Been thanked: 93 times

Re: Porting & Extending an Offset Mortgage - Easy to do?

#96924

Postby DrBunsenHoneydew » November 19th, 2017, 2:13 pm

moorfield wrote:Indeed - I'm paying +0.75% 15 years to go, so understandably I want to carry that on for as long as possible! I'll be speaking to a mortgage bod anyway in the new year which should answer my question for sure...

I think the chances of being able to do what you want are approximately zero.
In the absence of special factors, I'd expect you to find that...
They will be reluctant to go over 4.75x income for the maximum credit.
They will not increase the amount lent on a 0.75%+base rate for more than a 2-year deal on the extra facility, and even that would carry a large application fee.
So you would likely end up with 2 mortgages on different terms. If so, you might want to ensure the 'end dates' are the same to avoid future complexity.

moorfield
Lemon Quarter
Posts: 1162
Joined: November 7th, 2016, 1:56 pm
Has thanked: 158 times
Been thanked: 249 times

Re: Porting & Extending an Offset Mortgage - Easy to do?

#96938

Postby moorfield » November 19th, 2017, 4:27 pm

DrBunsenHoneydew wrote:I think the chances of being able to do what you want are approximately zero.
In the absence of special factors, I'd expect you to find that...
They will be reluctant to go over 4.75x income for the maximum credit.
They will not increase the amount lent on a 0.75%+base rate for more than a 2-year deal on the extra facility, and even that would carry a large application fee.
So you would likely end up with 2 mortgages on different terms. If so, you might want to ensure the 'end dates' are the same to avoid future complexity.


Thanks DrB. I suspect you're right and that's the most likely outcome.

DiamondEcho
Lemon Quarter
Posts: 2612
Joined: November 4th, 2016, 3:39 pm
Has thanked: 1907 times
Been thanked: 373 times

Re: Porting & Extending an Offset Mortgage - Easy to do?

#96948

Postby DiamondEcho » November 19th, 2017, 5:26 pm

moorfield wrote: Indeed - I'm paying +0.75% 15 years to go, so understandably I want to carry that on for as long as possible! I'll be speaking to a mortgage bod anyway in the new year which should answer my question for sure...


I'd start by reading the T+Cs of your mortgage, that will outline whether it's portable. Speaking to anyone other than your lender, like 'a mortgage bod', risks yielding a reply tilted towards the interests of the person giving it.

blazeboy
Posts: 7
Joined: February 6th, 2017, 4:56 pm
Been thanked: 1 time

Re: Porting & Extending an Offset Mortgage - Easy to do?

#99674

Postby blazeboy » November 28th, 2017, 7:26 pm

Providing your mortgage offer and mortgage illustration shows a porting condition then you should have no problem. If you want to raise more money "top up" this will be at a different rate and term than your current deal. It will be treated as a new application if raising more capital and you will have to provide proof of income to support the new deal.
The additional amount can be tied in to meet the remaining term of the existing mortgage so that the whole amount can be re-mortgaged at a later date. I have just completed such a mortgage for a client. A two year tracker rate without an early redemption penalty was taken out on the additional loan amount (£40k). Even with interest rate rises this is still the best arrangement as there is only 18 months remaining on the fixed rate deal.

moorfield
Lemon Quarter
Posts: 1162
Joined: November 7th, 2016, 1:56 pm
Has thanked: 158 times
Been thanked: 249 times

Re: Porting & Extending an Offset Mortgage - Easy to do?

#100073

Postby moorfield » November 29th, 2017, 10:35 pm

blazeboy wrote:Providing your mortgage offer and mortgage illustration shows a porting condition then you should have no problem. If you want to raise more money "top up" this will be at a different rate and term than your current deal. It will be treated as a new application if raising more capital and you will have to provide proof of income to support the new deal.
The additional amount can be tied in to meet the remaining term of the existing mortgage so that the whole amount can be re-mortgaged at a later date. I have just completed such a mortgage for a client. A two year tracker rate without an early redemption penalty was taken out on the additional loan amount (£40k). Even with interest rate rises this is still the best arrangement as there is only 18 months remaining on the fixed rate deal.


Thanks blazeboy, appreciate your input there.


Return to “Mortgages”

Who is online

Users browsing this forum: No registered users and 1 guest