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Moving to SVR due to pending sale
xepija8686
Posts: 17 Forumite
My house is on the market, I am planning to move and buy a new place. I have had a couple of offers but am holding out for a better one.
My fixed rate ends this month, I am not planning to buy a new product to avoid the complexity of porting and having two mortgages.
This means I will switch to a SVR of 8.5%. I can put £30k savings against the mortgage and have £27k left on the mortgage, which I could pay off over about 6 months (say if the sale and purchase of new property fails).
Is there any downside to paying down the mortgage now, my savings account only gives me 4.5%. I will of course leave an emergency fund of savings.
Any other suggestions?
My fixed rate ends this month, I am not planning to buy a new product to avoid the complexity of porting and having two mortgages.
This means I will switch to a SVR of 8.5%. I can put £30k savings against the mortgage and have £27k left on the mortgage, which I could pay off over about 6 months (say if the sale and purchase of new property fails).
Is there any downside to paying down the mortgage now, my savings account only gives me 4.5%. I will of course leave an emergency fund of savings.
Any other suggestions?
0
Comments
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No downside1
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Make sure your "emergency fund" is adequate to cover any upfront costs of moving house. In a similar position myself, now waiting to exchange on the sale of my house. Good luck!1
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I'm not sure there's that much complexity in porting? If you port the mortgage with the same lender - but need to borrow more for the new purchase - yes, you'd technically end up with the lending on the new property on two separate mortgage products (e.g. with different interest rates). But from your point of view this could save you money.xepija8686 said:My house is on the market, I am planning to move and buy a new place. I have had a couple of offers but am holding out for a better one.
My fixed rate ends this month, I am not planning to buy a new product to avoid the complexity of porting and having two mortgages.
This means I will switch to a SVR of 8.5%. I can put £30k savings against the mortgage and have £27k left on the mortgage, which I could pay off over about 6 months (say if the sale and purchase of new property fails).
Is there any downside to paying down the mortgage now, my savings account only gives me 4.5%. I will of course leave an emergency fund of savings.
Any other suggestions?
The downside of your plan is either paying more interest than you need to 8.5% vs e.g. 3.8% for a period or you end up losing interest on your savings. Get a new deal and you can have the lower interest payments on the loan AND keep earning savings interest.
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You might get better responses on the mortgage board, but you could be able to find a better rate with no exit fee (some tracker mortgages, for example).0
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