Variable rate mortgage, was planning on moving house within 3-6 months, not sure what to do now

iScottJS

Hi all,

Current home owner for about 9 years with around 30% mortgage paid off so far.

We are looking to move from our 2 bedroom house to 3 bedroom within the next 3-6 months, before all this chaos kicked off we were just about to get a mortgage in principle sorted this month and book viewings, but not sure what to do now.

My fixed rate deal with Nationwide already expired, I was always planning on renewing to a new fixed deal anyway but wanted to hold off as I knew we were wanting to move soon.

There's more talk of house prices dropping and interest rates continuing to rise, our timeline for moving looks like hilariously bad timing now.

The options seems to be:

• Stay in this house for a bit longer on variable rate, wait for the house prices drop
• Stay in this house for a bit longer and remortgage to a new fixed 2 year deal, wait for house prices to drop before moving even if it means incurring remortgaging fees if we still decide to move within the next 2 years, which is still likely
• Continue to move anyway within the next 3-6 months and what will be, will be

We do have some savings we could use to pay off chunks of the current mortgage which we were planning on putting towards the new house so we can borrow less.

Not really sure what to do. Any thoughts? Anyone in a similar position?

Thanks in advance.

mwarby

I think Nationwide mortgages are generally portable, ie you can still move.

The only obvious issues are

- would nationwide agree with valuation of new place

- if you need more borrowing that would be under a new rate, maybe Nationwide won't be best for this when time comes

- if you borrow less that might trigger some early repayment charges

dander

The thing with waiting for house prices to drop is that they will drop for a good reason. Lower prices won't be more affordable because interest rates will go up, cost of living will go up, banks will be far more sensitive on their affordability and credit checks.  I'd say it's definitely worth keeping an eye on what size of loan you'll be able to secure - there might be significant changes from a few months ago that will affect your plans. You might be in a place with wages and LTV that actually you'll be fine, but make sure you know where you stand.

gih

We are in a very similar situation. We're also home owners for 9 years, and our 5 year fixed term deal with Nationwide came to an end in September. We also plan to move - our house went up for sale last day of August.

Nationwide allows you to remortgage 5 months before your deal ends, so we locked into a new 10-year fixed deal back in April at 2.29%. Even though we planned to move, we did this because:
(1) We thought it unlikely we'd see 2.29% being available again, hence the 10 year fix.

(2) Nationwide mortgages are portable - so the plan was to just port this deal to the new house.
(3) Nationwide mortgage rates have been the best each time we remortgaged in the past, and so we thought Nationwide rates would be competitive for any additional borrowing we'd need when moving.

I'd say two big things have changed a lot over the past 10 days (since you-know-what):

(1) Point (3) above is no longer true - Nationwide mortgages seem quite uncompetitive at the minute, although who knows what the situation will be like again in a few months. 

(2) The chances of actually selling anytime soon seems to have gotten slimmer, as more and more buyers seem to be delaying.

We have some savings too, but I'm reluctant to use it to reduce the amount on our current deal. I'd prefer to use it to overpay immediately on whatever deal we take out for additional borrowing (inevitably with a higher rate) when we do move, i.e. maximise the amount borrowed on the current 2.29% deal that we'll port, and minimise the amount on any future higher rate deal.  

Having said all that, it's looking increasingly likely that we'll stay put for a bit longer, maybe 1-2 years, whether we want to or not.