Moving house when in a fixed rate mortgage

Lifes_Grand_Plan

Hi folks,

I'm a bit of a novice when it comes to Mortgages so hopefully someone can help me.

Currently coming to the end of a 5 year fixed rate with HSBC. When that ends I have £15k lump sum to pay off and then will continue with overpayments like I have done since day 1.

Obviously when the fixed rate ends I will go onto the SVR.

With the lump sum I can pay off, I am hoping I can get under 70% LTV

With mortgage rates likely to increase later in the year, I would like another fix and the HSBC 2-year fix at 2.99% looks good (except for the fee but hey ho).

However in the next year or two, if my wife or I can secure a better job then we will consider moving to a bigger house. So I am wondering how it works moving house when you are in the middle of a fixed rate?

HSBC claim that the mortgages are "portable" and can be taken with you when you move... but how does that work in reality, especially if the house I am moving to requires a bigger mortgage than the house that I am selling and moving from?

Thanks in advance for any help.

ryan86uk

Lifes_Grand_Plan wrote: »

Hi folks,

I'm a bit of a novice when it comes to Mortgages so hopefully someone can help me.

Currently coming to the end of a 5 year fixed rate with HSBC. When that ends I have £15k lump sum to pay off and then will continue with overpayments like I have done since day 1.

Obviously when the fixed rate ends I will go onto the SVR.

With the lump sum I can pay off, I am hoping I can get under 70% LTV

With mortgage rates likely to increase later in the year, I would like another fix and the HSBC 2-year fix at 2.99% looks good (except for the fee but hey ho).

However in the next year or two, if my wife or I can secure a better job then we will consider moving to a bigger house. So I am wondering how it works moving house when you are in the middle of a fixed rate?

HSBC claim that the mortgages are "portable" and can be taken with you when you move... but how does that work in reality, especially if the house I am moving to requires a bigger mortgage than the house that I am selling and moving from?

Thanks in advance for any help.

Quite simple really.

Example.

Sell house for 100K, Buy house for 200K.

Equity from sold house goes down as deposit on your new house. You carry on with the same mortgage deal i.e. same interest rate/term. Obviously repayments will be higher due to the increase in amount borrowed! :eek:

Smoked_Haddock

When we moved to a more expensive house we ported our existing mortgage (maintaining the same terms and conditions), and took a "further advance" from the same lender on new & slightly better terms.

CloudCuckooLand

Current amount may be ported on existing terms. Extra borrowing likely to be at today's terms. Check with your Lender. In today's tight lending environment, they may find reasons not to port/extend.

dimbo61

The problem might be the LTV so if you want to move from a £100K house with a 70% LTV to a £200K house you then need to find an extra £30K to keep the same LTV and hence the same deal.
You can either stay on the SVR and overpay like mad while house hunting or consider a longer fix and stay where you are

Lifes_Grand_Plan

Thanks guys... am overpaying like mad as it is anyway... the mortgage was 100% 5 years ago and hope to be down to 70% by the time the fix ends.

At present, my 25 year mortgage should be paid off in 13 years total... so almost halved the term through overpayments

**sde**

Im currently going through this process,and so far it seems 2 b pretty simple. We r keeping the current mortgage rate on the old part of the mortgage and the extrawill b at the new rate. How ever it has been like taking a completely new mortgage out at times as theyve asked 4 identification again,pay slips etc.this may just b the abbeys process though.

dimbo61

You dont say what your current rate is and what the mortgage reverts to at the end of the fix ?
HSBC SVR which is 3.94% I think!
As you have been able to overpay nearly 30% in 5 years ( well done!!) then if you want to keep your options open why not stay on the SVR and overpay

Lifes_Grand_Plan

Hi dimbo61....

I don't know what difference it makes what my current fix is, but i'm sure you asked for a good reason

My current 5 year fix is at 5.09% then reverts to SVR which at the moment as you say is 3.94%

The reason I want to fix again is because the 2 year 2.99% fix looks very good compared to my current fix and to the SVR.

With interest rates inevitably increasing very soon, I think the 2 year fix will give us security against rates rises on the SVR... hopefully in 2 years time the economy will be a little more stable than it is at the moment.

dimbo61

well if you are paying 5.09% now when the mortgage goes onto the SVR you can either reduce your payments or ask for the payment to remain static and overpay even more each month as you have complete flexability on the SVR!
Now you need to work out is taking the 2 year fix at 2.99% worth it with the cost of the fees? or are you better off staying on the SVR and overpaying if you can.
Now you still say that you hope to move to a bigger property and if the lender say NO you cant port your mortgage LTV over 70% you end up paying fees 2/3% to get out of your deal early and more fees to go to another lender.
You have to read all the paperwork that the 2 year fix comes with and what is required re porting
Once you have paid £15K off your mortgage your monthly payment should drop and if you continue to pay the same each month the overpayments will start to make a big difference

Lifes_Grand_Plan

Thanks dimbo... definitely won't be reducing my payments when my fixed rate ends... the fixed rate is the only thing stopping me overpaying by more. As soon as it finishes i'm going to up my payments from the current £860 odd to £1100.