£400K Mortgage Plan: Can I Sell My Home to Pay It Down?

Faxanadu82

Hi Forum members

I was hoping to get some advice on the following question:

Can I get a £400K mortgage for a new home and use proceeds from selling my current property for a lump sum repayment?

I’m looking for advice on whether this scenario is feasible:

• We’re planning to purchase a new home worth £500K with a £100K deposit set aside, leaving us with £400K to repay.
• I’d like to take out a £400K mortgage on a variable rate with unlimited repayments.
• I already own a property worth £260K outright (no mortgage on it) and plan to sell it.
• Once I sell my current property, I expect to make around £250K from the sale and would use this to make a lump sum repayment to reduce the mortgage balance.

Would this be possible, and are there any factors I should consider when discussing this with lenders?

Thanks for your advice!

Paty

Hoenir

In principle a mortgage lender isn't going to be concerned about the other property. Variable rate mortgages are available. Points you need to consider and weigh up. 

1. Being a second home the initial outlay on stamp duty will be £30k. Taking into account the recent budget changes that take effect from April 2025. 
2. Variable rate mortgage will be at an interest rate of 7%. (over £75 a day in interest)
3. You'll have all the ongoing costs for the second property to fund before it's sold. 

Faxanadu82

Thank you for your response—those are some excellent points I hadn’t fully considered. The stamp duty surcharge sounds ouch !

I’ll definitely take all of this into account when planning the next steps.

Much appreciated!

Yorkie1

You might also want to review your overall financial position when the other property is sold, e.g. emergency funds, pension provisions etc.