New mortgage deal- question

[StuTheGrouch]

Probably a really daft question; any pointers would be welcomed.

We have two deals running at the moment. The combined mortgage is 90% LTV (very recent house purchase). The second deal is for the additional borrowing we took when buying the house, the first (larger part) is from the house we recently sold.

The first deal (2.6% I think) runs out (the fixed interest rates end) later this year, whereas the newest component (2.3%) of the mortgage is a 5 year fixed deal. Naturally, I want to secure a new fixed deal for the main part of the mortgage, as moving onto the variable rate will bump the repayments up by over £100 a month. How do we deal with the LTV if we moved this part of the mortgage to another lender? Currently the whole mortgage is with Natwest.

Let's say, for example, the house purchase is £500k. Total mortgage is £450k. Part 1 (deal ending soon) is £300k, part 2 is £150k. I only want to remortgage £300k, but in all online calculators it will ask for the value of the house, thus leading to an incorrect LTV.

[Sarnie]

StuTheGrouch said:

How do we deal with the LTV if we moved this part of the mortgage to another lender?

You can't do this...................

[StuTheGrouch]

So our only options are to change to a new deal with Natwest, or go onto the variable rate?

[Sarnie]

StuTheGrouch said:

So our only options are to change to a new deal with Natwest, or go onto the variable rate?

Yes.........the end dates are always going to be out of sync with each other..........continual remortgaging..........the only way out of it will be;

- allow one of the accounts to move onto the SVR whilst you want for the other account to catch up
- redeem the mortgage and pay the ERC on one or both accounts

It's the downside of porting....................

[StuTheGrouch]

Ok, that all makes sense, thanks. In this case we'll fix the older part of the mortgage for a further 5 years with Natwest, allow the newer part to enter a variable rate for a few months and then shop around.

I knew it was probably a daft question! Thanks Sarnie

[Sarnie]

No problem!

[Marcellus]

Might be worth looking at how much the early termination charge is on the smaller mortgage and what the deal is you can get for one consolidated mortgage... it may be that over 5 years you're better off paying the fine/charge and then having a good fixed rate.