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  • FIRST POST
    • liviboy
    • By liviboy 5th Oct 17, 2:14 PM
    • 353Posts
    • 117Thanks
    liviboy
    Switching mortgage deal - future looking like a move...
    • #1
    • 5th Oct 17, 2:14 PM
    Switching mortgage deal - future looking like a move... 5th Oct 17 at 2:14 PM
    Hi all,

    Just looking for some thoughts...

    My current mortgage deal with NW ends in February so I can switch to a better deal come November for a December start date.

    Due to valuations, we have now crossed into the 80% LTV so the deals are much better than currently paying.

    However, we are looking to move house in the next 18 months or so...a slight upsize and a move to a better area for schools, etc. According to all the online calculators we'll be able to afford it (even stress-testing)...we can't move right now due to a few credit card balances...but these should be cleared in the next 14 months (hence 18 months (ish) for the move!). But once clear (and we have a plan in action to do so) we'll be "clear" to move (sorry!!!).

    However, I am wondering whether to opt for a 2 year fix or 2 year tracker, or indeed a longer fix?

    The tracker doesn't have an early repayment charge, the fixed rates do.

    If we take a fixed rate and then want to move, as we are upsizing our LTV will likely increase...how does this work with "porting" our mortgage?

    Sorry if I'm being a bit thick.

    My initial plan was to opt for the tracker s it has no ERC...

    However the rates are slightly better with the Fix...but don't want to get stung on an ERC because we need to borrow more to buy the new house...

    Tracker is 2 years

    Fixed is either 2,3,5 or 10 years.

    It's a minefield and any help would be very much appreciated!
    Last edited by liviboy; 05-10-2017 at 2:17 PM.
Page 1
    • kingstreet
    • By kingstreet 5th Oct 17, 2:16 PM
    • 32,070 Posts
    • 17,165 Thanks
    kingstreet
    • #2
    • 5th Oct 17, 2:16 PM
    • #2
    • 5th Oct 17, 2:16 PM
    Tracker.

    You can only port a rate where the lender is willing to lend what you want next time. Not worth risking it. Another lender may lend more, have a better deal etc.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • liviboy
    • By liviboy 5th Oct 17, 2:26 PM
    • 353 Posts
    • 117 Thanks
    liviboy
    • #3
    • 5th Oct 17, 2:26 PM
    • #3
    • 5th Oct 17, 2:26 PM
    Tracker.

    You can only port a rate where the lender is willing to lend what you want next time. Not worth risking it. Another lender may lend more, have a better deal etc.
    Originally posted by kingstreet
    Thanks KS, that was the avenue I was most looking to go down. even with the predicted BOE rate rise come November, the rate will still be a million times better than our current rate). And it gives that flexibility and lack of worry if we do manage our move in the time...
    • SG27
    • By SG27 5th Oct 17, 9:20 PM
    • 1,914 Posts
    • 1,195 Thanks
    SG27
    • #4
    • 5th Oct 17, 9:20 PM
    • #4
    • 5th Oct 17, 9:20 PM
    Im in a very similar situation. Looking to move hopefully some time next year and our mkrtgage deal ends Dec. We have gone for a 2 year tracker with 1% ERC which worsed case would cost us £800. The plan is use the lower rate to overpay to bring our future payments down and help insulate against future interest rate rises.
    Mortgage Debt: £93,537.48/£105,025 Feb 13
    Overpayments so far: £3,939.72
    • YHM
    • By YHM 7th Oct 17, 5:16 PM
    • 94 Posts
    • 32 Thanks
    YHM
    • #5
    • 7th Oct 17, 5:16 PM
    • #5
    • 7th Oct 17, 5:16 PM
    There are some lenders out there that have flexible fixed rate options, that do not carry ERC's. Best of both worlds!

    Speak to a Mortgage Broker and I am sure they can guide you....
    I am a Mortgage Broker.

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice
    • liviboy
    • By liviboy 8th Oct 17, 4:17 PM
    • 353 Posts
    • 117 Thanks
    liviboy
    • #6
    • 8th Oct 17, 4:17 PM
    • #6
    • 8th Oct 17, 4:17 PM
    Thanks YHM,

    However, given we are looking to move in the next 12-24 months, we just want to ensure all our finances are fully in order before then looking to get mortgage approval for the higher amount and at that point find a decent local broker...

    No intention at this stage of switching our mortgage to another lender due to the hassle, paperwork and CC balances (all at 0% but we don't have the cash available to clear in one go)...given that most mortgage offers ask for CCs to be cleared prior to funds being released...

    We're just looking to reduce our interest rate (currently 5.89% OUCH!) which will. in turn free up a bit more cash to clear our CCs that bit quicker (all old expenses, nothing new added to the balances), which will hopefully make life easier when we try to get mortgage approval for a new house...

    The rate is either Fixed at 1.39% for 2 years but with a 2% ERC OR 1.14+BOE Base Rate tracker for 2 years but with no ERC.

    Even with the base rate increasing (likely to 0.5, possibly to 0.75), the difference in what we pay vs saving on the fixed rate is fairly small and would be all but wiped out by the ERC anyway...
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