Mortgage question

tonydee

Hi, Sums rounded up or down for ease.

Scenario:

I have a £88k mortgage fixed for 10 years (it is portabe).

Sell my house £200k
Buy another house for £150k

Could someone explain what will happen to the equity?

Many thanks

homer_j_3

net of selling fees and purchasing costs you will need a mortgage for about 50-55k. You may have a proportionate early red charge to pay on the difference in borrowing if you exercise portability

firesidemaid

it depends partly on any terms and conditions of your mortgage eg. minimum LTV etc.

but, in theory it is your choice. either keep the equity to do with as you wish, or use it to put yet a bigger deposit on your new house and pay less interest.

tonydee

Thanks Homer,

So I can just reduce that 10 year fixed mortgage to 50k given that thats ok with the lender (nationwide). Could I also assume that if needs be I could release some of this equity?

Thanks again

homer_j_3

when you sell your house, your equity is the amount that is left once mortgage has been paid. You will have costs to take off this as stated above.

What you do with the equity is for you to decide.If you want to take a bit of it and not put it towards the next purchase then thats fin, you will have a larger mortgage thats all