First Post - Mortgage advice

JKing_3

This is my first post after browsing this forum for a good few months now. I just wanted to post some details about my current situation in a view to receiving some advice on thew way to proceed financially.

My current situation is, I bought a property in 2008 with a friend and we currently owe £116,500 through Nationwide. The mortgage was fixed for 2 years at 6% and the fixed deal comes to an end next month afterwhich we'll drop onto the Nationwide BMR (currently 2.5% (2% above base)). Our mortgage payments are due to reduce from £593.76 to £242.00, remember this is interest only.

We have just put the house up for sale (£125,000) as my house mate and I both now want to move in with our respective partners. My house mate's partner has just purchased a property and I will be buying a new property with my partner.

After speaking with Nationwide, I am able to keep the current mortgage product (convert to repayment and change the term to 25 years) remove my house mate's name, add my partner + transfer this to our new property. We will then add any additional funds needed (possibly up to 40k) at a higher rate, either fixed or variable. We have around £20,000 in savings for a deposit (10%) + fees + an additional £7000-9000 for renovation/furniture etc depending on how much my current property sells for.

Breakdown as such:

• New property purchase price: £170,000
• Deposit: £17,000 (10%)
• Mortgage amount (25 years): £153,000 = (£116,500 @ 2.5% = £522.00) + (£36500 @ 5.88% = £232.50)
• Total Monthly Payment = £754.50

I guess my question is really, is the above the best option or would there be a smarter way of working the finances??

getmore4less

Did they say you could move it on the given senario with 90%LTV or just based on the size of loan and your finances?

JKing_3

It was on 90% LTV on the new property. If we had 15% deposit, the additional borrowed on top of the £116,500 would be at a more favourable rate than the 5.88% offered.