Fixed term of mortgage ending 31st March + help to buy equity loan to repay and wanting to move

Milts1234

Hi,

I am coming to the end of my 5 year fixed term mortgage at 1.76% on 31/03/25. I bought my house with a £95k help to buy equity loan, and house price will have gone up by around 10% so will have around £104k to repay on the equity loan. We want to move later this year so I am evaluating my options on the remortgage whilst retaining flexibility to move later in the year.

These are my options as I see it:

Option 1: Remortgage as soon as my current deal ends to some kind of ERC free tracker deal, paying off the equity loan leaving myself to choose a new mortgage. Upside is I avoid going to SVR but downside is if we then move soon after I'll be doing two mortgage application in a short period of time and the tracker rate is higher than a fixed rate.

Option 2: Move to a fixed rate which is portable and payoff the equity loan. Then later in the year apply to my new lender to port the mortgage to my new property. Upside is my rate will be lower than SVR and and a tracker but the risk is I can't port my mortgage to a new property and get hit with an ERC.

Option 3: Move onto the SVR rate for my current deal until we sell and just get a standard home mover mortgage when ready to move in the summer. I initially wanted to avoid this at all costs but I believe it's not as bad as I initially thought. As whilst my rate will jump up to around 8.2% (which is awful), that will only be on my current mortgage lending which is around £307k. In this case I wouldn't pay off the equity loan immediately and would start being charged interest on this which help to buy confirmed is is £139 a month. As I wouldn't remortgage and take on the equity loan amount immediately there is not huge difference between going onto the SVR on my remaining balance +£139 a month versus remortgaging taking on the additional £100k and my rate being between 4.5-5%. I then retain the flexibility to do what I want mortgage wise when I move home. The risk on this one is my move takes longer than planned and I'm on the SVR for longer. 

Any thoughts/feedback appreciated

Milts

Hoenir

Remaining with your existing lender is not a remortgage. Simply a new choice of mortgage product. Which can normally be performed online. You should be able to view options now by logging onto your mortgage account. Given there's less two months to go. Suggest you see what's on offer first. Your current lender may well offer a base rate tracker product. Usefull if you don't want to tie yourself in for the moment. While you formulate your plans. 

Milts1234

Hoenir said:

Remaining with your existing lender is not a remortgage. Simply a new choice of mortgage product. Which can normally be performed online. You should be able to view options now by logging onto your mortgage account. Given there's less two months to go. Suggest you see what's on offer first. Your current lender may well offer a base rate tracker product. Usefull if you don't want to tie yourself in for the moment. While you formulate your plans. 

I can see options with my current lender and already spoke to them but they don't have an ERC free tracker. There is 1% in the first year so I would be charged around £4k to stay with them and exit in year 1. Any thoughts on better options between 1,2,3?

amnblog

Option 4: Move on to a fixed rate and keep the equity loan. Repay the equity loan when you move and port the mortgage rate topping it up later.

(this keeps your outgoings down but will work only if you do no expect the property it rise in value in the short term? 

Milts1234

amnblog said:

Option 4: Move on to a fixed rate and keep the equity loan. Repay the equity loan when you move and port the mortgage rate topping it up later.

(this keeps your outgoings down but will work only if you do no expect the property it rise in value in the short term? 

By port the mortgage rate and top it up later do you mean take out an additional product when I port to cover the equity loan amount? What is the relevance of the property rising in value in the short term? Is there also a risk the new fixed rate lender won't let me Port later?

Hoenir

Porting is always subject to conditions. Never a contractual right. 

amnblog

Milts1234 said:

amnblog said:

Option 4: Move on to a fixed rate and keep the equity loan. Repay the equity loan when you move and port the mortgage rate topping it up later.

(this keeps your outgoings down but will work only if you do no expect the property it rise in value in the short term? 

By port the mortgage rate and top it up later do you mean take out an additional product when I port to cover the equity loan amount? What is the relevance of the property rising in value in the short term? Is there also a risk the new fixed rate lender won't let me Port later?

Yes, take the extra on a different product. The rise in value impacts on your cost to buy out the H2B loan. If too much it could wipe out the saving of keeping the H2B loan.

You have the right to port the product, not the mortgage. The mortgage loan is subject to a new agreement and acceptability by the Lender. If they will lend again, you can port the mortgage product to the new mortgage.

Have a good mortgage broker assess if you are likely to be OK for the new mortgage.

Milts1234

amnblog said:

Milts1234 said:

amnblog said:

Option 4: Move on to a fixed rate and keep the equity loan. Repay the equity loan when you move and port the mortgage rate topping it up later.

(this keeps your outgoings down but will work only if you do no expect the property it rise in value in the short term? 

By port the mortgage rate and top it up later do you mean take out an additional product when I port to cover the equity loan amount? What is the relevance of the property rising in value in the short term? Is there also a risk the new fixed rate lender won't let me Port later?

Yes, take the extra on a different product. The rise in value impacts on your cost to buy out the H2B loan. If too much it could wipe out the saving of keeping the H2B loan.

You have the right to port the product, not the mortgage. The mortgage loan is subject to a new agreement and acceptability by the Lender. If they will lend again, you can port the mortgage product to the new mortgage.

Have a good mortgage broker assess if you are likely to be OK for the new mortgage.

Any thoughts on my Option 3?