Remortgage or secured loan?

rpgo

Hi all,
I bought a property in South London in 2019 with a NatWest mortgage. I also had some lodgers to help pay the mortgage. I kept maxing out the overpayments every year (initially 10% and then 20%).
Last year my fixed rate was renegotiated and went from 1.99% to 4.09%. I can still make the 20% overpayment but my prospects of being mortgage free in the next 2 years are slowly fading since I became a dad. However, in a pinch, I can sell off some of my investment portfolio to pay it all off.

Me and my wife have agreed that we would like to move out to a nicer area so our daughter can go to a better school. She will have to apply to the school around September 2026 so we will have to move by then. The mortgage on our current home is only on my name and my wife has spent all this time saving for a deposit so we can buy our next home 'together'.

Initially, my plan was to have my mortgage paid off completely so I can get a secured loan on it and get the most cash out of it. Add it to my wife's deposit and buy the new place. I would then rent out my property to help pay the loan. I assumed the LTV would be higher and the interest rates lower for secured loans (less risk for lender?) but after some research, I found out that maybe a remortgage is a better option. My current mortgage is down to 20% LTV, I have an excellent credit score and no other debts.

Also, after a lot of research, I find myself confused about the difference between unencumbered mortgage and secured loan. Can someone clarify please?

There is also a chance that our next home would require my wife to get a mortgage to meet the price of the new property (we are upgrading). I'm not sure if it would be better to have both of us on separate mortgages/loans or if it is possible to join it together somehow and reap some benefits.

How can I get as much cash as possible from my house? Is the extra money worth the ERC if I end up paying it all off first? Remortgage or secured loan?

Thanks in advance.

Hoenir

All mortgages are loans. The term "mortgage" comes from the name of the legal charge registered against the property to secure the money borrowed. 

An unencumbered mortgage is when the property is owned outright and there's no other charges registered against it. 

Renting out the property is more than likely going to result in a higher rate of interest being charged. 

rpgo

Hoenir said:

All mortgages are loans. The term "mortgage" comes from the name of the legal charge registered against the property to secure the money borrowed. 

An unencumbered mortgage is when the property is owned outright and there's no other charges registered against it. 

I understand they are all loans but if I ask for a secured loan and an unencumbered mortgage, am I asking for the same product? Is it just semantics and technical jargon?

Hoenir said:

Renting out the property is more than likely going to result in a higher rate of interest being charged. 

Any idea on how much higher the rate will be, roughly?