Buying an bigger/more expensive house

Thrugelmir

aidan1980 wrote: »

forgive me if im being a bit thick but wouldn't the 10K come from the sale of the house in more equity?

You are right. The more equity you have in the existing property. The less you'll need to borrow in total to fund the purchase of the new property.

kingstreet

Thrugelmir wrote: »

You are right. The more equity you have in the existing property. The less you'll need to borrow in total to fund the purchase of the new property.

Pay it off the mortgage or have it in a savings account. It's the same thing. It still means a smaller mortgage for the next property. What's at issue is the rate split within that mortgage.

lesta1980

kingstreet wrote: »

Pay it off the mortgage or have it in a savings account. It's the same thing. It still means a smaller mortgage for the next property. What's at issue is the rate split within that mortgage.

got you now, i think

kingstreet

Let's try it the maths way;-

Overpayment route;-

Mortgage £100k
Overpay £10k

Remainder £90k

Sell for £150k - £90k = £60k equity.

Buy for £260k - £60k equity deposit = £200k mortgage needed with £90k on ported low rate and £110k on new higher rate.

or

Savings route;-

Mortgage £100k
Savings £10k

Mortgage £100k

Sell for £150k - £100k = £50k equity + £10k savings = £60k total.

Buy for £260k - £50k equity and £10k savings deposit = £200k mortgage needed with £100k on ported low rate and £100k on new higher rate.

lesta1980

kingstreet wrote: »

Let's try it the maths way;-

Overpayment route;-

Mortgage £100k
Overpay £10k

Remainder £90k

Sell for £150k - £90k = £60k equity.

Buy for £260k - £60k equity deposit = £200k mortgage needed with £90k on ported low rate and £110k on new higher rate.

or

Savings route;-

Mortgage £100k
Savings £10k

Mortgage £100k

Sell for £150k - £100k = £50k equity + £10k savings = £60k total.

Buy for £260k - £50k equity and £10k savings deposit = £200k mortgage needed with £100k on ported low rate and £100k on new higher rate.

makes sense now, thanks

movilogo

First check with your bank whether you can actually port the mortgage. Every mortgage has different T&Cs.

Also in the meantime, keep your money in a good interest paying account.