Fixed rate/ trading up?

Frugal

Hi all,

Does anyone know if there is any way to trade up on properties if you are tied in to a fixed rate mortgage on the one you currently have?

I assumed that because you're needing to borrow more money (for a more expensive property) you'd need to scrap the mortgage you have and get a different one.

In that case, you'd need to pay the massive fee to get out of the fixed rate...

But is there any way around this?

Thanks

Yorkie1

Potentially, yes.

Check the T&Cs of your mortgage to see whether it is portable.

This means that, in principle, when you sell up you can transfer the interest rate to the new property on the amount of money which is outstanding on the old mortgage; you then get a second interest rate (same lender) on the extra money you're borrowing on the new house (if applicable).

However, this is not the same thing as actually transferring the mortgage. You will still have to go through the affordability checks for the new mortgage - only if you are accepted as a borrower on the new amount / property, will the portability of the interest rate come into play.

Frugal

Hello, thanks very much, I didn't realise that was possible. I'll look into that - appreciate the tip.