Selling next year porting mortgage and getting new small mortgage.

fletcher1985

I have a mortgage fixed until 2027 at 2.79% with £78k left. This is my house on my own, but my partner lives with me. We really want to buy a house together and sell mine in the next year or two. Since savings interest rates have been so good, we have been saving like crazy for when we decide to take the plunge and sell up and buy a house. My question is: I can port my current mortgage and will need to get another to make up any difference. We should have at least £30k saved by that time. Could we put that £30k down as a deposit on the next mortgage, as that will be at a higher interest rate, or should we pay off as much of my current mortgage as we can.

BarelySentientAI

It's the same thing isn't it?

Paying £30k off the current mortgage means that you will have £30k extra cash left over from the sale and will need £30k less of the new mortgage. 

Keeping £30k in cash to use as extra deposit will means you need £30k less of the new mortgage. 

I can see what you mean but I can't work out how it would actually happen like you are thinking.

fletcher1985

my thinking is with the new mortgage it will be a higher rate of interest so would make sense to take out a smaller higher interest mortgage but didn't know if i put that in my current mortgage it would make it so they might lend more if we needed?

my view is 2.79% current mortgage pay off 10k a year for 3 years might mean we could barrow more?
new mortgage maybe 4.5% for example 30k less on that would mean we would need less meaning less of the higher rate of interest.

plus we are also saving this money is 5.20% savings accounts 

BarelySentientAI

Well if you are getting more from savings than the mortgage interest - it makes sense to keep it in savings.

Having less existing borrowing would usually mean you can borrow more, that is true.

And I see what you mean with the new mortgage - keeping the lower interest loan bigger so you need less extra.  Also true.