Re-fixing mortgage with plans to move?

Larabar

Hi all,

Hoping to get some advice on my situation. I own a property and a couple of months ago my fixed rate ended and I'm on the SVR. I also have some savings, my plan was always to make a one-off payment towards my mortgage and then re-fix at a lower rate.

However, I am now seriously considering moving (my property is on the market, I'm going to viewings at other properties). My 2 questions:

1) I think it still seems to make sense to sign back up to a fixed rate on my current property. My lender (Santander) has said that if I move I wouldn't be charged any fees as long as I sell the property to buy a new one, I get the new mortgage with them and it is for at least the same amount as I have now. All 3 of those I would meet. They say my fixed rate would remain the same for the term, and I'm happy with the rate they've offered.

For all I know, it may take months for me to find the next place or for me to get a buyer and I would be over halving my rate if I re-fix vs my current SVR.
Does anyone foresee anything I'm not considering here?

2) If I put half of my savings towards the mortgage before re-fixing, I would still have enough left for stamp duty if I did move. If I put all of the savings towards it, I obviously wouldn't. So, if I put most of my savings into the mortgage, just keeping back some for fees, if I did move could I just get a larger mortgage to cover the stamp duty (in effect, borrowing back what I gave)?

Again, if this whole process took several months I would be saving over those months by paying interest on a lower loan. My LTV would remain the same whether I paid this off or not, so that isn't a factor.

Any advice would be great

davidmcn

Larabar wrote: »

Does anyone foresee anything I'm not considering here?

Santander will ask you whether you are planning to sell. I'm not sure what happens if you admit that you are.

ACG

I would be reluctant to tie in to any lender if you are thinking of moving. If they change their lending criteria next week and you no longer fit criteria they may not allow you to port the mortgage over to the new property.

Porting is something you apply for and it is usually treated like a brand new application so they can decline the request if they like.... Have a read up on this forum for some examples.

My deal came to an end at the end of September and I am planning on moving but nothing has come up that I fancy yet, I switched to a new lender on a tracker rate with no early repayment charges. Its a competitive deal (albeit not the absolute best) and had no fees at all, if I decide to move or win the lottery I can clear the mortgage in full without incuring any charges, that might be worth looking in to. It gives you the flexibility whilst reducing your costs. It just does not give you the guarantee of a fixed rate.

SavingSteve

You meet the affordability based in your current borrowing. You may find Santander are stricter on the lending criteria such that the amount you want to borrow for the new place may not meet their criteria.

You're then stuck in the position of either accepting a lower amount (and thus cheaper house) or paying the ERC (assuming you meet affordability with another lender).

In your situation I'd be looking for a low / no fee product with no ERC as suggested by ACG above.

Coventry's flexx for term springs to mind, there are likely others.

Larabar

Thanks for the replies, much appreciated.

I've previously been through the online mortgage calculators to confirm that they would lend me the amount I need for the next place, therefore I don't think the lending criteria would be an issue. However, I do see that by tying in I am effectively at their mercy if the new deal doesn't work out as I expected, for any reason.

I'll look at the the trackers on the market and see also what Santander can offer that doesn't have an ERC for this interim period.