Advice needed, want to sell next year

sturgeon

I’m currently on a tracker rate fixed for 2 years. I’m interested to switch to a fixed rate with no early repayment charge as I have no ERC on my current deal and I’m worried that the BOE rate is going up and up and 5-6% rates are scary. 

The thing is I also want to sell early next year. I’ve been stuck in my flat which has had fire safety issues and hence a lot of remedial work which should end by February 23. 

I’m not overly concerned about a credit check now but will likely apply for another mortgage around that time when I can sell and will be looking to buy elsewhere. Is that going to be an issue?

im also now unsure about moving as it’ll be into a much more expensive property and if I end up completing by say June 23 with mortgage rates at 5-6%+ it’s going to be super expensive. I could wait it out here for longer as the capital cost of the mortgage will be lower plus I can lock into a fixed rate now. I am quite keen to move though. I’m therefore considering renting but getting an equivalent property in a decent part of London is going to cost me £1200+ more than my current mortgage. At least I could accrue decent savings putting all my sale proceeds in the bank though. 

Any thoughts?

Rachelredwood16

I'm not a mortgage advisor but I don't think fixed rates come without an ERC? Happy to be proved wrong by someone qualified though! 

Who's doing the remedial work? Other than the fire safety issues, is there anything else wrong with the flat?

You say KEEN to move, but do you NEED to move? If you're worried about higher interest rates of 5-6% then it doesn't seem wise to move on. Have you worked out what you can borrow and what kind of property that can get you where you want to live? 

How comfortable will you be adding an extra £1200pm on top of your current monthly mortgage payments? If it's feasible and you still have plenty of money leftover, how does that compare to the type of mortgage you'd need at 5-6%? If it's similar then what's the harm in doing that? Not ideal, but if you want to move it might be what you need to do. Also, if it's similar then you're paying off your mortgage and not someone else's. How does that extra rent compare to your current mortgage increasing by a few % if you stuck with the tracker? Your mortgage wouldn't increase by £1200pm surely?

You also need to weigh up how long you'd be comfortable renting, most tenancies are 12 months, you can get some for 6 but it may not be favourable for you, what if you're living somewhere "worse" than your current flat and paying much more money for it and not paying off your mortgage? 

It may be worth speaking with a mortgage advisor to discuss your options.

K_S

sturgeon said:

I’m currently on a tracker rate fixed for 2 years. I’m interested to switch to a fixed rate with no early repayment charge as I have no ERC on my current deal and I’m worried that the BOE rate is going up and up and 5-6% rates are scary. 

The thing is I also want to sell early next year. I’ve been stuck in my flat which has had fire safety issues and hence a lot of remedial work which should end by February 23. 

@sturgeon You have a couple of lenders that offer 2/5 yr fix ERC-free products but the rates are already 4.5-5.5% on them and unless your block has an EWS1 with an A1/A2/B1 rating, it unlikely to be mortgageable by a different lender.