Porting mortgage question

[brockovrs]

Hi all,

My partner and I are looking to buy a bigger house together, I've checked and my current mortgage is portable but I think I'm not understanding something properly.

Some approx figures.

My current house (in my name only)
Value: 200k
Mortgage: 50K

In my mind that gives me 150k equity that I can use on a new property as a deposit.

New house (to be owned by both of us)
Value: 350k
Mortgage 200K (value of house minus the 150 deposit from the sale of my old property)


The bit that is confusing me is that after speaking to my lender about porting etc, apparently the new 200K mortgage is made up of the 50k of my existing mortgage, and topped up with another 150k from the lender, but surely that then means my partner will be paying "my" mortgage on the house I've just sold, which hardly seems fair, and I'd have 50k that could be used to clear "my" old mortgage completely.

So what's the benefit of porting a mortgage plus borrowing additional money vs just remortgaging the whole amount.

Hopefully I've just misunderstood something really simple!

[Sarnie]

I think you are over thinking it.

There is no difference.

Forget about porting for a second........if you sell your house and pay off your mortgage you will have £150k deposit for the new property.......you then both take out a £200k mortgage to buy your £150k property.

Or you port your £50k and then take an additional £150k further advance.........you both then have a £200k mortgage.

The difference is that you have have any Early Repayment Charges, then these will be waived when you port the mortgage.

[brockovrs]

Sarnie said:

I think you are over thinking it.

There is no difference.

Forget about porting for a second........if you sell your house and pay off your mortgage you will have £150k deposit for the new property.......you then both take out a £200k mortgage to buy your £150k property.

Or you port your £50k and then take an additional £150k further advance.........you both then have a £200k mortgage.

The difference is that you have have any Early Repayment Charges, then these will be waived when you port the mortgage.

I probably am overthinking it, and I still feel a bit daft!

If I was just selling up it makes sense, I sell the house, pay the mortgage and am left with 150K and no debt, I can then buy a new house using that money as a deposit. (albeit with Early Repayment Charges as you mentioned)

If I ported the current 50k, does that then mean I could use the full 200k from selling the house as a deposit on the new property, (as I wont have used 50k to pay off the mortgage as it has been ported), meaning I'd only need to borrow an extra 100k, which would reduce my monthly payments?

[Sarnie]

brockovrs said:

If I ported the current 50k, does that then mean I could use the full 200k from selling the house

You wouldn't have the full £200k from selling your house.............you owe £50k on it so you would have £150k.......

[brockovrs]

Sarnie said:

You wouldn't have the full £200k from selling your house.............you owe £50k on it so you would have £150k.......

That's the bit I'm really struggling to get my head around

I know I would still owe the 50k, but as I have not paid that mortgage off (due to that balance being ported to the new house). Wouldn't mean that I do get the full 200 from selling the house? Because If I did get 150k from the house, that would mean the mortgage has been paid off and so wouldnt need to be ported?

Just typing that last sentence out makes me realise I can't be right, but I can't work out why, I promise I'm not usually this much of an idiot

[eltawater]

You're missing the person in between, your conveyancer.

Your conveyancer will likely:

• receive the funds from your buyer (£200k)
• drawdown an advance for the remaining funds from your mortgage company (£150k)
• send that buyers £200k + £150k new advance to your vendor's conveyancer to pay for your purchase

You now owe £50k outstanding (ported) + £150k new advance on your £350k new home to your mortgage company.

Your conveyancer isn't paying off your existing mortgage when porting, just adding to it with the new advance from your mortgage company.

[brockovrs]

Thank you both for the explanations, I get it now!

I'd got it into my head that the 50K was somehow tied to my current house and me, and so it would be unfair for my missus to be paying that off when we got the new house. Obviously that's nonsense now I understand it properly!

[eltawater]

Well look at it another way, your missus is getting the benefit of your £150k equity as a deposit into the new house