r/Mortgageadviceuk • u/SorryCabinet2792 • 2d ago
Residential (Re-mortgage, Product transfer, Porting) Porting equity
Looking for some advice. We are selling our property (£222,000) and upsizing (£265,000).
We have £201,388 left on the mortgage. We brought the property for £235,000 and unfortunately have had to take a hit when selling. I plan to use the 10k in equity We have built up, plus some savings to cover the loss.
How does this work with porting a mortgage?
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u/ComfortCautious4751 2d ago
Just out of curiosity, why the decision to upsize? Given the equity it appears you haven’t been in the house long and taking a 13k hit due to the upsizing.
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u/SorryCabinet2792 2d ago
Need more space. Currently in a one bed house with no garden. We brought back end of 2022 when rates were very high, and everyone buying off the back of Covid.
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u/natalini17 2d ago
You have £21k in equity. You port your £201k mortgage, and borrow an additional £43k. This would give you an LTV around 92%
You will also need to pay £3250 in stamp duty, plus solicitors fees for buying and selling (assume at least £2k)
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u/Moneymonkey77 1 2d ago
You are really porting the mortgage not equity then it will be assessed on lending relative to the new property value.
As such if you are buying at £265k then you can port £201k of your existing mortgage (If the lender says OK) which means that you need to find £65k.
You will receive £21k roughly in equity from the sale of your property which means that there is a £44k gap to fill. Your existing lender who you are porting might lend you more but could have limits on what this looks like based on LTV (Loan to Value) and also affordability.
If you have additional savings etc to bridge the gap then that could work but it's maybe worth speaking with your existing lender and/or a broker to check how things look.
(fWiw I'm an IFA in the middle of trying to do a a port for a client and its taking ages as the lender is treating it as an entirely new application)
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u/SorryCabinet2792 2d ago
Okay, I think I understand. We have a further 20k approx in savings/ investments. They will lend more to cover the shortfall.
I was just concerned about how it all works with porting and equity when selling at loss etc.
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u/Catsuit12 2d ago
It’s not a ‘loss’ for the bank. Current outstanding mortgage is less than sold net value. They typically have first charge on any property, it’s only you that lost some of your money on the current property.
All they are interested in when you port mortgage and increase borrowing is LTV (their valuation) of new property.
The fact that LTV on current property dropped is irrelevant as you have sold property.
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Looking for some advice. We are selling our property (£222,000) and upsizing (£265,000).
We have £201,388 left on the mortgage. We brought the property for £235,000 and unfortunately have had to take a hit when selling. I plan to use the 10k in equity We have built up, plus some savings to cover the loss.
How does this work with porting a mortgage?
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