Mortgage Question

[new2forum]

Hi There... need some advice please.

I will use the following only as an example to illustrate the point.

Say I currently have a mortgage:
Year 1 mortgage amount - $100,000 (I already put 20% down)
- interest rate is 4% (these are fictional rates)
- I have agreed to a 5 year term

Year 2 I decide to purchase a larger home, however I require an additonal mortgage.
- I need an addiontal $150,000 (I have enough for an additional 20% down... not including amount from year 1)
- interest rate are @ 6%

Am I allowed to move my 1st mortgage to my new house AND tender out my new required funds ($150,000)? Or do I have to have my mortgage consolidated with one bank?

SO basically can I have part of my mortgage ($100,000) with one bank to capture the low rate.... and part of my mortgage with another bank?

Please assume that I have good credit etc.

Thanks for your assistance.

[Thalo]

It's theoretically possible to have a 1st mortgage at one bank and a 2nd mortgage at another. For the purpose of a new home purchase though I don't think it's doable. You'd have to get simultaneous approvals at two banks (the one where you're porting your existing mortgage and the one where you're getting the new one) and it would be more complicated than it's worth.

[bball4life]

Are you planning to sell the current property? If so, you can go to your lender and ask them to do a port and increase. Since your mortgage was done a year ago, your interest rate should be lower than the current rate.

Benefits
1. not breaking the mortgage - no penalty
2. Current mortgage amount at lower rate, increased amount at current rate, lender will blend in the interest rate which should be lower.

[notanexpert]

It's theoretically possible to have a 1st mortgage at one bank and a 2nd mortgage at another. For the purpose of a new home purchase though I don't think it's doable. You'd have to get simultaneous approvals at two banks (the one where you're porting your existing mortgage and the one where you're getting the new one) and it would be more complicated than it's worth.

In addition, you will never get the best rates on a 2nd mortgage, because that lender will always be in the second position to collect in case of any default.