Remortgaging with intention to move home

TheShape

Just running this by the forum in case there are options that I've missed/anything else to consider.

My partner and I (unmarried/not civil partners) each own a property.  We are hoping to move to a new property  at sometime in the future, hopefully next year but with two properties to sell and her daughter looking to move out/buy her own home before we move, the timescale is hard to determine.

With this in mind she's unsure what to do at the end of her current mortgage fix in September.  Approx 5/6 years left on term with approx £32k balance.  Current options under consideration with Santander are:

2 year fix @ 1.54% - 3% early repayment fee

SVR of 3.35%

Lifetime tracker @ Base rate + 3.25% seems somewhat pointless to consider.

Better to fix and potentially pay 3% early repayment, pay £26 p/m extra on SVR or remortgage elsewhere?  First Direct have a better rate Lifetime tracker without a fee and no standard valuation fee.  Would there be legal fees to add though?

She could probably pay a significant amount off of the remaining balance come September but it's probably useful to retain savings that may be used to help her daughter to move out.

I'm probably somewhat fortunate that I don't have to worry about this with my HSBC Lifetime tracker.

K_S

@theshape With a 32k balance, it's hard to go massively wrong whatever you choose to do.

If you do choose to remortgage to a new lender, the conveyancing costs could either be covered by the lender free legals or cashback on the product.

getmore4less

Could you sell it aiming to complete Sept(ish) and move into the other.

Remove the issues around timing sale of 2 properties.


1.81% on £32k will start out costing ~£50pm extra.

TheShape

getmore4less said:

Could you sell it aiming to complete Sept(ish) and move into the other.

Remove the issues around timing sale of 2 properties.


1.81% on £32k will start out costing ~£50pm extra.

I don't expect we'll be in a position to sell either property by September. 

I expect we'll probably have to sell one and move into the other at some point as you say to remove the issues of selling two properties at the same time.

getmore4less

Another option might be extra borrowing with HSBC to remove the mortgage on this one and retain the cash.

£32k over 5 years extra cost of the SVR over the 2 year fix.

amount	rate	payment	owing
£32,000.00	1.54%	£579.99	£18,873.18
£32,000.00	3.35%	£579.99	£19,838.37

~£965 extra (over 6 years £491pm ~£1003)

IAMIAM

What annoys me about HSBC is they have no fee free trackers BUT they do have probably the best ERC fees, as its reduces daily until the term ends, so its literally a few pounds in the last month or so if dates are an issue or you want to repay, move, complete a move early.

First Direct are the opposite, great booking fees, great no fee trackers to jump on if needs be, but their fixed rate ERC are expensive compared to most on two year fixes. 

I think remortgage is the way forward, fix the rate as low as you can with as low as you can on LTV bracket, then when you move, the rate is fixed and can be taken right up to 95% ltv which is great when porting and you have minimal equity for the second home purchase.