Fixed rate mortgage - moving house

cckclark

Hi all

I want to move to a more expensive house meaning I need to increase my mortgage bit I have c18 months left on my fixed rate mortgage.

I want to fix for 5y for my additional borrowing as I don't trust interest rates / Brexit...

My current lender has the best rates so will stay with them

The options seem to be to pay the early repayment charge and get a new mortgage or take out a new mortgage for the extra bit but then have 2 parallel mortgages with the same lender

I'm not keen on either option as I don't want to pay £2k erc nor have two mortgages in parallel meaning 2 sets of arrangement fees to keep paying

I am thinking of borrowing enough to pay off my existing mortgage when the fix ends and sticking that cash in ISA s and savings accounts for the 18monyhs until the fix ends. But that would be c£80k spread over a few a counts so a bit of a pain but will save me the £2k erc.

Anyone done similar or have other ideas?

Thanks all

BoGoF

Confused by your idea of borrowing enough to pay off your mortgage but putting it in an ISA? Will this not mean you are still having to pay your existing mortgage and the additional amount you have borrowed to put in an ISA?

It will be nigh on impossible to borrow £80k and how is this going to help you move house now?

Maybe I've misunderstood your idea but seems a bit bonkers to me.

davidmcn

cckclark wrote: »

I don't want to have two mortgages in parallel meaning 2 sets of arrangement fees to keep paying

Why would you "keep paying" arrangement fees? They're normally a lump sum at the outset - and then only if you choose a product which has a fee.

cckclark

Hi

On the arrangement fee issue, as I would have 2 mortgages to renew each time the fix runs out I would have 2 arrangement fees to pay

cckclark

Hi

Yes I would have to pay interest on the extra amount borrowed but fixed term ISA s and savings at least match the mortgage rate so would be cost neutral. I could then use it to pay off my existing mortgage in 18mnths when the fix runs out leaving me with just my new mortgage

Make sense?

cckclark

Also, the extra £80k borrowed would just be added to my new mortgage. I have enough headroom in the LTV to get the rate I want still

davidmcn

cckclark wrote: »

On the arrangement fee issue, as I would have 2 mortgages to renew each time the fix runs out I would have 2 arrangement fees to pay

Well, as I said you could choose products without an arrangement fee. Or try to get them to roughly coincide (e.g. a 4 year fix when you renew your current deal) and then replace them both at the same time.

BoGoF

So what is your intention on moving home......now or in 18 months?

cckclark

Annoyingly I would have to get a 2 y fix to line them up. And I want longer as don't trust Brexit.... But I may do that as it's easier than my elaborate plan. But riskier.

Thanks

cckclark

Moving now

BoGoF

What are you going to do with existing property then?

To be clear, you intend to keep existing mortgage and property, take out additional £80k borrowing to invest and clear existing mortgage in 18 months and] take out a new mortgage to move house?

Good luck with that!