Switching to new deal but plan to move soon

ultramagnetic_commuter

Current fixed rate ends in December and I'll be looking to find another fix to prevent going onto lenders SVR.

Problem is that we're likely to be moving house next year due to expanding family and we'll be borrowing more as part of that process.

I'm concerned about incurring additional fees or penalties for moving and adding additional lending whilst still in the fixed period of any new deal I go onto this year - am I right to be concerned? Is this going to be an issue if I fix again in Dec?

(currently with A&L)

Thanks

Alligator1

Yes, you are right to be concerned. If you are planning to move soon after your rate ends in Dec then you may be better staying with your lenders SVR until you move, then take out a new mortgage on a fixed rate when you buy the new property.

Otherwise, look for a product with no tie in period or fees, such as HSBC. However, if you do this you will still have to pay valuation fees and legal fees so depending on the size of your mortgage and how long you stay after Dec it may well not be worth bothering changing lender.

Hope that helps.

poppy10_2

Probably not worth fixing if you are going to move within a year - the fees and early repayment charges will outweigh the minor difference in the interest rates.

ultramagnetic_commuter

Thanks both.
Mortgage is about £81k so going onto SVR will be about an extra £80 a month.

I recall when I switched a couple of years ago I heard the term "portable" which I assume relates to moving house. I didn't pay attention as I wasn't planning to move then - are some fixed deals "portable" or does that mean something completely different?

dunstonh

Mortgage is about £81k so going onto SVR will be about an extra £80 a month.

Thats not much of an increase then. Plus, you may get lucky and find the SVR will be lower by then.

I recall when I switched a couple of years ago I heard the term "portable" which I assume relates to moving house. I didn't pay attention as I wasn't planning to move then - are some fixed deals "portable" or does that mean something completely different?

portability is not guaranteed and you have to apply for the mortgage on the new property and meet current lending criteria (whatever that ends up being). The problem there is if you are looking for 95% and your lender only goes to 75% then you are stuffed and the portability option is useless for you.

ultramagnetic_commuter

We'd probably be looking at borrowing and additional £50k (making £130k) on a £250k house so LTV shouldn't be an issue.

When you say 'portability is not guaranteed' do you mean it isn't guaranteed in case they won't give us what we're asking for? I'm very cautious so hope that wouldn't be an issue.

cheers

dunstonh

When you say 'portability is not guaranteed' do you mean it isn't guaranteed in case they won't give us what we're asking for? I'm very cautious so hope that wouldn't be an issue.

Only if you meet their lending criteria at the time you move. If they wont lend you what you want, you will have to pay all the exit fees if you go elsewhere.

luckyfool

e.g. Northern Rock. People with portable Northern Rock mortgages in those circumstances are potentially stuffed if they needed their old relaxed lending criteria and do not qualify under their new super tight criteria.