Paying off mortgage for a short time?

DrPips

Hi all,

I’m in a situation where I’m about to move in with my girlfriend who has £100k left on her mortgage. The plan is to live in her house for around 6 months, before we relocate to where I currently live. We will rent at first whilst we look to buy. The reason we’re doing it in this way is because of applying for school places etc. we will keep the house we currently live in and rent it out.

The long term plan will be to buy together, once we are settled.

My quandary comes with having around £90k in the bank and I was thinking about using that to pay off a significant chunk of her mortgage to reduce the monthly payments so we can save more for a bigger deposit whilst we’re renting.  I would have myself added to the deeds to safeguard myself.  We would then remortgage her house and use the money as a deposit on the new house we buy.

Since the budget on Friday there seems to be a lot of talk about interest rates etc, so I’m not sure what to do.  My worry would be that I pay off her mortgage at a very low interest rate and then when we come to remortgage to raise money for a deposit, the interest and therefore the repayments would be much higher.

What would you guys advise?
TIA

london21

DrPips said:

Hi all,

I’m in a situation where I’m about to move in with my girlfriend who has £100k left on her mortgage. The plan is to live in her house for around 6 months, before we relocate to where I currently live. We will rent at first whilst we look to buy. The reason we’re doing it in this way is because of applying for school places etc. we will keep the house we currently live in and rent it out.

The long term plan will be to buy together, once we are settled.

My quandary comes with having around £90k in the bank and I was thinking about using that to pay off a significant chunk of her mortgage to reduce the monthly payments so we can save more for a bigger deposit whilst we’re renting.  I would have myself added to the deeds to safeguard myself.  We would then remortgage her house and use the money as a deposit on the new house we buy.

Since the budget on Friday there seems to be a lot of talk about interest rates etc, so I’m not sure what to do.  My worry would be that I pay off her mortgage at a very low interest rate and then when we come to remortgage to raise money for a deposit, the interest and therefore the repayments would be much higher.

What would you guys advise?
TIA

It is a big financial commitment, if you are Comfortable with it.