Downsizing and Current mortgage

matt1987

Evening all,

I have been keeping a close eye on whats happening to the BOE base rates recently, along with see how this is affecting mortgage products etc. I currently have 2 years left on my fixed deal at 1.71%. The value of the house is around £360k (3 bed semi in a nice location) however in the next few years it will likely need some modernisation such as a new kitchen and bathroom etc.

I have been looking at rates as they are and my current mortgage of £719 a month would go up to £1090 a month on the cheapest rate if I was to remortgage now - and rates could be even worse by the time my fixed term ends. I currently owe around £175k.

I was thinking of selling up and buying a smaller 2 bed home (I only have a small family). After all the fees involved it would only work out around £25k less however how does this work within a current deal? I know my mortgage allows to port over as I inquired around 2 years ago about taking extra borrowing and moving to a bigger home (Thankfully I never did!)... but what happens if your taking out less borrowing? Would I just keep the excess money and continue paying the mortgage i am currently on, and then overpay it with the extra?

Is £25k even going to be worth saving on a mortgage? How much would that likely save a month? I suppose I wouldnt have the expense of spending money on updating the current house (Theres a few smaller houses I have seen that are pretty much to a good standard already).

Any advice welcome!

Matt

housebuyer143

Have you ever lived in a two bed house with 3 or more people? It's not particularly comfortable. Personally, I would rather have £25k extra debt and not be crushed into a living space that is too small. 

matt1987

housebuyer143 said:

Have you ever lived in a two bed house with 3 or more people? It's not particularly comfortable. Personally, I would rather have £25k extra debt and not be crushed into a living space that is too small. 

Thanks, the houses I am looking at are on par with my current house in terms of size - and also have a garage which could be a room going forward. My current house currently has no garage but has more land (Bigger garden and driveway typically of a 30's built)