Two different mortgages on same property?

[Pepperwand]

This is probably a really stupid question and shows my ignorance but here we go....

We are just about to put our house on the market, it is valued at £320k and we have £150k equity in it. I called my mortgage provider as currently in a fixed deal that ends March 2021 as I wanted to work out how much they would potentially lend to us for our next property. They said to check their online affordability calculator to get a rough idea, which I did. I also checked a couple of other providers and their calculators came back that they would potentially lend us more.

My question is, if we were to find preferential rates with another provider could we port our existing mortgage to a new property and take out a second mortgage with a different provider to make up the difference? This will be our first time selling a property and buying another, we were first time buyers last time so it's all new!

Depending on terms of your mortgage, and sufficient equity in the new property you may be able to port and make up the difference with the same lender.

No other first mortgage lender would sit behind the first charge (your existing mortgage) as a second charge on the property.

Alternatively, repay your existing mortgage and take the hit on the early exit penalty. I can not imagine it is more than 1%

Your penalty is likely to be much less than the extra interest on a second charge loan, if you really can’t wait until next year.

Mortgage lenders won't accept being a second charge on the property. Can't you just port your existing deal and then shop around after it expires?

You have to get the additional money from your current lender. You do end up with 2 mortgages but they can't be with different lenders. So you'd get additional funding on the standard variable rate or a short term fix maybe and then when the fixed rate expires you can shop around for the best deal for the whole amount.

@trilbydoll thank you, I didn't realise that both mortgages on one property had to be the same lender. That makes it simpler in one way, as long as they'll lend us the extra we need!

A second charge does not have to be by the same lender. It is more costly because the second lender comes behind the first should they need to make a claim.
As mentioned above, the penalty is likely to be less than the interest on a second charge loan but only looking at your individual details can tell you for sure.