Remortgage before moving

quietandy

Hi

We have a fixed rate mortgage deal that ends in May. Current payment is £718 p.m. The mortgage will revert to SVR after May and payments would increase by £138 p.m. (and no early repayment charges).

The obvious thing would be to move to a better deal however to complicate things, we are also looking to move sometime within the next 12-18 months to a bigger property which will require an increased mortgage. I’m trying to work out whether it would be better to pay the extra £138 a month until we are ready to move or remortgage to a cheaper deal with no early repayment charges (so we can exit when we want) or get one we can port across later?

I’m loathed to pay the extra £138 as if we were to remortgage our current place, we would pay something like £450 p.m so in effect we would be losing out on a lot more than just £138 p.m! I’m also worried about the effect of having a mortgage application on file if we wanted to apply again 12-18 months later when moving.

I feel at a point where I have ‘over-thought’ this and am starting to lose the wood for the trees. Any thoughts/opinions are therefore gratefully received!

amnblog

The ability to port a product does not mean a lender will offer you a mortgage on the new property.


The smart move is to stay as you are until you move.

kingstreet

Does your existing lender have any penalty-free products you can consider so you can avoid having to remortgage and also avoid tying yourself in?

You really don't want to be stuck with a lender or have to pay a penalty when moving house. What if the lender won't/can't lend on the new property?

nubbins

Hi,

I was in the same situation and remortgaged (to free up some equity for a BTL) with Nationwide free valuation,free legals and no tie in. From memory it took just over a month and I used a fee free broker, the whole thing went extremely smoothly.

Unless I have missed something, from May you will be paying aprox £850 and you could get a remortgage for £450 a month? If thats a yes I would be straight on the phone to my broker!

I have done the same as you in the past and thought/talked about remortgaging and before you know it another chunk of time has passed and another few thousand down the drain. As long as you are not tied in with horrendous penalties and you can get something with free legals and valuation then I can't see why you wouldn't but then again i'm not a broker!

kingstreet

nubbins wrote: »

Hi,

I was in the same situation and remortgaged (to free up some equity for a BTL) with Nationwide free valuation,free legals and no tie in. From memory it took just over a month and I used a fee free broker, the whole thing went extremely smoothly.

Unless I have missed something, from May you will be paying aprox £850 and you could get a remortgage for £450 a month? If thats a yes I would be straight on the phone to my broker!

I have done the same as you in the past and thought/talked about remortgaging and before you know it another chunk of time has passed and another few thousand down the drain. As long as you are not tied in with horrendous penalties and you can get something with free legals and valuation then I can't see why you wouldn't but then again i'm not a broker!

After penalty-free customer retention products from existing lender have been considered, penalty-free remortgage products would be the next logical consideration.

quietandy

Thanks all for your responses, much appreciated.

I will first see what the lender has to offer in the way of penalty-free retention products and then look into other penalty-free products such as the Nationwide deals with no ERC/fees.

If I were to remortgage do you think an approved application in early 2015 would cause any knock-on effect for an application later in the year/2016?

kingstreet

Unlikely, but obviously no guarantees.

nubbins

I got a residential remortgage with Nationwide in Oct and a BTL with Clydesdale in December and my so called credit score dropped a bit but has since got back to pre October levels.