Portability and Overpayments

Posted on 16 August 2011 by Gregor


My wife and I would like to sell our home and then rent for a while, but we have a massive Early Repayment Charge on our mortgage. I also have a property in my name which we rent out which has no ERC on it. Our mortgage is portable, so assuming the same LTV on both properties, can we port the mortgage to the other property?

10% overpayments are allowed each year on our mortgage, but we didn't overpay in year 1. Can we now overpay by 20% in year 2 now that we have the money to do so?  We're with Bank of Ireland.

Gregor

I think it is very unlikely that Bank of Ireland (BOI) will allow you to port your mortgage to a property you already own.  You should check your original Key Facts Information (KFI), mortgage offer and the terms and conditions issued at the time of offer, these should tell you when you can exercise the portability option.  If you no longer have these documents then BOI will be able to advise you and you should ask for copies to be sent to you along with a copy of their complaints procedure.

In the event that they will not allow you to port the mortgage and the wording is in anyway ambiguous, you should complain to your lender and state that you are not being treated fairly.  They will have to respond to this within set timescales and if you can't reach an agreement they will have to issue a terms of deadlock letter, at this point you can then make a complaint to the Financial Ombudsman.  There is no guarantee that a complaint will be upheld, but sometimes the very threat can make a lender change their mind before reaching this stage.

The 10% overpayment facility with Bank of Ireland is per financial year (1st April - 31st March) and once passed the allowance is lost.

Peter

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