Mortgage deal ending

rizwan567

A friend of mine needs some help. He asked this question from me, I could not answer so I thought to consult with forum:

He has a house which he bought 5 years back for 120,000 with deposit of 10%. The current value of house is 140,000 approx. His mortgage deal with Halifax is ending after 7 days. He is currently on tracker deal which is 2% above BOE base rate.

He needs to know, if he goes on SVR and within next 12 months he sells the house to buy a new property (without applying for additional borrowing), will moving the mortgage be a problem if he is on SVR? OR it is advisable to buy a new mortgage deal so moving/upsizing is easier from lender's point of view? Basically he got this mortgage after so much struggle and he is worried/scared if he looses this mortgage then it will be very hard to secure a new mortgage.

What do you suggest in this situation?

Thanks in advance.

kingstreet

It makes no difference.

If he moves house, he has to make a new mortgage application, with the usual credit, affordability checks and valuation.

The rate he's on isn't relevant, although he may wish to avoid being "tied in" in case his current lender declines his application. Then he'd have to pay any early repayment penalty to be able to go elsewhere.

rizwan567

Thanks for your reply. So what I get from your reply is, when moving a house its not any easier if you already have a mortgage. Because your existing lender will take it as a new application and will do all the checks which you undergo when you bought your first home.

getmore4less

What rate are they moving to?

is it really a 5 year base+2% tracker to SVR follow on?.

kingstreet

rizwan567 wrote: »

Thanks for your reply. So what I get from your reply is, when moving a house its not any easier if you already have a mortgage. Because your existing lender will take it as a new application and will do all the checks which you undergo when you bought your first home.

Yes. A house move is always a whole new mortgage with a whole new application. The current mortgage is repaid in full, on the sale of the current property.

He may be able to "port" the rate from the old mortgage to a new one, if he qualifies for a new mortgage with his current lender.