1 mortgage 2 sub mortgages - how does it work?!

[Clemfandango95]

Hi all just wondering if anyone has been in this situation and could explain to me in simple terms 🫠

We have just had an offer in our home.
Our home is currently mortgaged at 2.4% (£118,000)

We took a small remortgage to do some much needed renovations at 3.8% (£18,000)
This shows as a sub-account on our mortgage. Both 5 year fixed.

When we buy our next property, we will be borrowing more, and porting our current mortgage to avoid exit fees and because the rates are good...

Does this additional borrowing become a third mortgage (2nd sub?). How does the overall interest rate get worked out?

Is three mortgages even a thing or when we apply to borrow more will they all just be combined?

I've never moved before as you can tell 🤣

Thanks x

I ported my mortgage and now have a sub account, both on different rates. I imagine when you move, you will have three different accounts🤷‍♀️

We had this. We had one mortgage, ported that to new property and the extra was a sub account, then had an advance which was another sub account, all with different interest rates and fixed periods. We had to stay with our mortgage provider for a few more years than we wanted so that we could line up all of the fixed rates to finish within 6 months of each other, we had to pay standard variable for a short time on two of them then in January we were finally able to re mortgage with a new provider for the whole amount so now have one mortgage. Its a bit of a pain!

It will become another sub mortgage. The interest rate will be whatever they have on at the time when you apply.

Yes the new borrowing becomes a third mortgage at the current new loan rate, not at the rate of either of the other two. So you will end up with three different loan rates.

At one point we have 3 different mortgages for to moving house and porting previous mortgages (due to better interest rates).

As others have said, you'll have multiple sub mortgages. How long is left on your five year fix? Speak to a broker as there are ways of tying all of these together down the line into one mortgage, usually by moving to penalty free tracker for a few months when a rate ends then remortgaging everything into one.