Which mortgage as short-term option?

peachyy

Hello, my partner is about to buy his first home. His father passed away last year and he has inherited a large chunk of money (50% of the house he is wanting to buy), and also half of his father's home which has just been up for sale. The house he is buying was a part exchange, so there is no onward chain so the completion date is end of March/early April. This means that he is very unlikely to have sold his father's house before the completion date so is taking out a mortgage to borrow the rest of the money temporarily.

My question is: which is the best kind of mortgage to go for in this situation? He is hoping to pay the mortage off within 6-12 months (all depending on how quickly the house sells), so needs something where he can pay this off asap with as little fees as possible for doing so. Also, are we right in thinking he is best not to be up front about his intentions with the mortgage providers?

Thanks in advance

ACG

A mortgage with no early repayment charges?
You should not get asked how long you intend to keep the mortgage for, but if you do you need to be honest otherwise it is mortgage fraud.

foxy-stoat

The Early Repayment Charges will be listed out in most lenders Key Fact sheet, or look on their website under terms and conditions.


In the scheme of things these charges will be fairly small in the terms of home ownership (1 or 2%), but normally you can overpay by 10% a year without fees so maybe he should take out a 2 year fixed and overpay the maximum and wait until the fixed term is up and settle the mortgage, keeping the cash in Premium Bonds for a year or 2 and some ISA's or savings accounts.

JimmyTheWig

As well as no/low ERCs you want to minimise the product fees as well.
If you're not going to be paying it for too long then the interest rate doesn't really matter.

[Though do consider foxy-stoat's suggestion above - that way if things take longer than planned you won't be too much out of pocket.]

AnotherJoe

He might have to take the standard variable rate to get a mortage without an ERC.

dimbo61

Have a look at offset mortgages.
Once he sells the property he just puts the money into the offset account for a few years. No Interest