Remortgaging when you plan to move

junebug87

Our 3 yr fix with Leeds Building Society is coming to an end so we need to remortgage. 

We would ideally like to move within the next couple of years, though there is no guarantee we'd be able to find somewhere suitable to move to.

I've had two different conversations with two mortgage brokers who are recommending different things:

1) Switch to a tracker mortgage/variable rate until we move - gives us flexibility to move when we want to but has the risk of rate rises
2) Go with a 5 year fix with Santander or Nationwide and port the mortgage if/when we do decide to move - gives us a decent rate but limits us to topping up our mortgage with one lender or paying high ERC

Anyone have any opinions on what approach (or what other approach) would be best in this situation?

Is there an option to have a fixed rate mortgage with no/low ERC that would give us the reassurance of the fixed rate but the flexibility to switch lender when we move if needed? Or does that not exist?

I don't like the idea of a variable rate to be honest, but I am worried about the porting option as I believe that would potentially involve two payments/remortgages and may be a lot of extra effort to manage?

penners324

2 year fix....

kingstreet

I'd go the ERC-free tracker route for the time being.

The second option falls down if you can't port for some reason. Don't forget porting is predicated on your ability to get the new mortgage on the new property and that means compliance with lender criteria at the time.

IAMIAM

Depends on rates. If I was remortgaging on say a 75% LTV rate to get a good fix for 5 years, I would secure this rate, then put house on the market, then apply for additional borrowing on the higher rate and port the 5 year fix rate and plan to align them again when I could. 

Moving on to a tracker doesn't do it for me, depends what LTV you are going from and too.

K_S

@junebug87 If you think you might need to maximise borrowing when you move, then porting could be a bad choice as you will be limited to the criteria and borrowing numbers possible through one single lender rather than the whole market.

If you are confident that you'll only need to borrow well within your max affordability (from a lender point of view) and your income circumstances will be largely unchanged, then porting may be worth considering.