Increase deposit when re-mortgaging

cbmaxyz

In January 2025, my fixed-rate mortgage will end and I suspect I’ll wish to re-mortgage with a higher deposit – i.e. put my savings into my mortgage.  If I choose that approach, then when would I be required to transfer the money to the new mortgage provider?  Would it be on the first day of the new mortgage, or sooner?  I can find a lot of advice online about when to have funds ready during a property purchase, but nothing about re-mortgaging.

The reason I ask is that I’m trying to judge whether it is “safe” to lock away my savings for 2 years until Jan 2025.  They of course mustn’t be locked away when I need to pay the extra deposit!

Orchid12

I would have thought you would need to send the extra money to the solicitor once you’ve agreed a date for the remortgage to take place. 

I secured a remortgage deal a few months back but waiting as long as I can on the lower rate I have atm before going to the new one. I have to agree a date with the solicitor. So you should be able to have some notice before needing it. 

I guess the other thing you could do is just overpay your current mortgage if it’s up to the 10%

BlondBoy

Depends if you’re remortgaging (to a new lender) or switching to a new deal (with your existing lender). 

if it’s the former, you can arrange the new mortgage for the amount less your savings. Then just before you complete, pay the solicitor your savings and they pay off the remaining balance of the old mortgage with them.

If it’s the latter, depends whether you’ve got an an annual overpayment allowance on the fixed rate deal. If you have, and your savings are less than that allowance, you can use your savings as an overpayment just before you switch deals. 

If you haven’t got an allowance for overpayment, or your savings are too large, just wait for the fixed rate to expire, then make the overpayment when you’re on the SVR. And then do a product switch to a new fixed deal on the lower amount.