Advice on porting and length of term for second part of mortgage - any advice appreciated!

[thelastmullercorner]

Hi, I thought I'd ask for some advice on here, as feel I'm in a bit over my head!

We are 2 years 3 months into a 5 year fixed term, and are looking to move house, so we are looking to port. We've already checked and can do this with our lender. I've spoken to a mortgage broker for rates, who advised the second part of the mortgage being taken out over 2 years, and then we can 'join up' the two mortgages when the fixed terms are over.

The only thing is that I'm super anxious about mortgage rates going up. We're not going for the max that we would lend us, but I hate borrowing and get really scared at the thought of us not being able to afford our mortgage if rates went up massively.

We could go for a 5 year at 1.84% or a 10 year at 2.44% for the second part. We're loaning an extra 100k.

What have other people done when porting please? Any advice would be really appreciated!

I'd check the small print because I'd imagine that you'll be tied into the same lender for your 'part one' when the current fix comes to an end. You may well find rates won't be anywhere near as good at that point. I'd be inclined to go with your broker's advice, assuming they're a good one!

We've never used a broker but took out a second part to our mortgage and made sure the fixed rate didn't go beyond the fixed rate for the first part.

If your mortgage consists of two parts you can’t change lender without paying an early redemption fee until both fixed rate periods are over.

If you took the second part out on a longer fixed period you would be looking to get a fixed deal for part one with your current lender until the end of the fixed period of part two.

Alternately you would be on their variable rate for part one until you could switch lender at the end of the fixed period for part two.

If you take the second part out with a product that means both parts fixed rate ends at the same time then you have the option to remortgage elsewhere.

New customers are often offered better deals than existing ones which is why your broker is suggesting the second option.

Hi @HettyPain yes we would be tied in until the rest of the term is up.

Thanks @BaseDrops I hadn't thought of the new customer bit.

Daft question, but do rates tend to differ that much between banks? I'd sort of assumed they would all be similar - we're with nationwide currently.

We could pay off the initial mortgage and remortgage with another bank and just get the full lot on a 10 year but I'm not sure if we'd just be wasting 2k.

I think I'm just so anxious about rates going up and us not being able to afford the mortgage. If my husband lost his job and rates went up to 5% we could still manage just

You need to add in any product fees as well as early redemption charges to compare costs properly.

If you’d be more comfortable being on a 10 year ask your broker to get a quote with your existing mortgage being switched to the 10 year as well as new one on 10 year. If there is a product fee it might work out similar overall compared to paying 2 product fees in 3 years.

How much is the whole mortgage going to be...is the £100k a substantial increase? That’d probably influence me in the decision.

We are in the process of doing this. We have 1 year left on a 5 year fix. We have taken on an additional 70k mortgage and have a flexible product for that portion. We will then completely remortgage the full amount next year when the 5 year fix is up. We have an ERP of 6.5k so worth it for us.

Hi @BaseDrops it is without a mortgage fee, I got told to go for one without one in case the house purchase fell through so we didn't lose it?

The mortgage in total is around £173k on a £303k house.

@ramblingsonthego how does the flexible product work please? Is that like a tracker?

Many thanks to all for advice