5-year fixed ending next March and want to move house next summer

Milts1234

Hi All,

My 5 year fixed ends in March 2025 and we are looking to move home next Summer to allow our kids to finish their school year before moving. What options do I have to get to the summer without having to go on a standard variable rate for 3-4 months? My current deal is at 1.76% so want to avoid that as it will hit hard!

I was thinking of remortgaging on time and then porting that to a new property 3-4 months later. However we are looking to move to a cheaper area so I think I might get hit with a fee if my borrowing requirement then shrinks by a considerable amount when I try to port.

Thanks for any advice

Hoenir

You could opt for a product such as a base rate tracker. Would provide flexibility if the intention is to downsize. 

Mark_d

What sort of numbers are we talking about?

Suppose you currently live in a £1m property with outstanding mortgage borrowing of £500k.  You equivalent property in the new area costs £800k.  You might need to reduce your borrowing to maintain the LTV ratio, but as the necessary reduction is less than 10% of 500k, you shouldn't be hit be a penalty.

Of course the specifics depend on the terms of your mortgage and the actual numbers involved.

Milts1234

Hoenir said:

You could opt for a product such as a base rate tracker. Would provide flexibility if the intention is to downsize. 

Yes I was considering going to my current lender and asking about this. Complicating factor is I had Help to Buy Loan to buy this house which I'll repay when I remortgage so not sure if that would be a problem with a short term tracker. 

Milts1234

Mark_d said:

What sort of numbers are we talking about?

Suppose you currently live in a £1m property with outstanding mortgage borrowing of £500k.  You equivalent property in the new area costs £800k.  You might need to reduce your borrowing to maintain the LTV ratio, but as the necessary reduction is less than 10% of 500k, you shouldn't be hit be a penalty.

Of course the specifics depend on the terms of your mortgage and the actual numbers involved.

£525-550k house with £310k mortgage by end of fixed term (next April) with £95k(ish) to repay on gov help to buy loan. So estimated equity of £120-145k in current house. If we move it will be to a house between £440-500k.  

Hoenir

Milts1234 said:

Hoenir said:

You could opt for a product such as a base rate tracker. Would provide flexibility if the intention is to downsize. 

Yes I was considering going to my current lender and asking about this. Complicating factor is I had Help to Buy Loan to buy this house which I'll repay when I remortgage so not sure if that would be a problem with a short term tracker. 

The mortgage product you chose next March makes zero difference. The HTB loan will need to be repaid in full when you sell the property. While the mortgage itself can be ported. 

Milts1234

Hoenir said:

Milts1234 said:

Hoenir said:

You could opt for a product such as a base rate tracker. Would provide flexibility if the intention is to downsize. 

Yes I was considering going to my current lender and asking about this. Complicating factor is I had Help to Buy Loan to buy this house which I'll repay when I remortgage so not sure if that would be a problem with a short term tracker. 

The mortgage product you chose next March makes zero difference. The HTB loan will need to be repaid in full when you sell the property. While the mortgage itself can be ported. 

Do you mean I can remortgage onto a tracker and not repay the HTB loan, and then when I sell 3-4 months later repay the HTB loan?