Moving Home

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Mortgages

What is a Moving Home Mortgage?

So the time has come to move house. Maybe your needs have changed. Maybe you’re moving for work reasons. Maybe it’s because of relationships.

No matter what the reason is you probably still have a mortgage on your current property.

  • Should you stay with this mortgage?
  • Do you want to start afresh?
  • Do you need to borrow more so that you can make the move?

We work with a specialist mortgage broker who covers the whole market. We’re just what you need to help you navigate the wide choice of mortgage products and answer all the questions you probably have.

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  • Access the whole market
  • Compare 100s of deals
  • Rates start at 3.2% APRC (Rep. 4.1% APRC)
  • Up to 95% LTV
  • All credit ratings welcome
  • No upfront fees

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Mortgage Options when Moving Home

When moving to your new house there are two basic options open to you:

 

1. Take your current mortgage with you

This option is sometimes called “porting your mortgage”. Whether you can or you can’t depends on the specific terms of the mortgage.

You may wish to port your mortgage if it is a good deal, but you may find you can’t. Or you may prefer to get a new, better deal but discover that your current lender charges high exit fees that prevent you.

Porting your mortgage may sound the easiest route, but:

  • you may still need to pay fees for the privilege including to cover the cost of valuing the new property
  • you will also need to reapply for the mortgage – it could be years since you originally took out the mortgage and some facts may have changed:
    • lending criteria have been tightened
    • your employment/income has changed
    • you have missed repayments on some credit
    • you have taken out more credit
    • you need to increase the size of the mortgage to buy your next home

2. Get a new Mortgage

Rather than porting your mortgage, you could get a new one, either from your current provider or from a new one.

This is where we can help you identify the option(s) best suited to your needs and circumstances. Simply request a quote and we can start to help you out.

It also makes sense to read our mortgage checklist – these are the questions you need to consider. The answers will help you choose the optimal mortgage deal.

 

What Happens to a Mortgage on Selling a Home?

As you sell one home the proceeds pay off the original mortgage. Any surplus is the equity which become the deposit for the new home. This and the new mortgage is used to pay for your new home.

You may need to take account of exit fees and early repayment charges when looking at the overall financial picture.

 

Useful Moving Home Articles

Finding a New Mortgage Deal

Before you even commit to looking for another house you need to have a good idea about how much you can afford – in particular the value of your current house (and the equity you have in it) and the largest mortgage you could reasonably afford to repay. Once you know these figures you can start to think more seriously about moving home.

When it comes to choosing your mortgage we would recommend using a whole-market broker, like us. We can help you find the right deal, and to help us you should:

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Our Money & Credit Guides

If you’re uncertain which type of credit might suit you or you have a money problem then one of guides may help you. We summarise each type of loan and their pros and cons, and address issues regarding debt and credit ratings.

Moving Home Mortgage FAQs

Moving Home Mortgages: things to know before you apply

How can I keep the cost of my mortgage to a minimum?

Here are some thoughts on making your mortgage as cheap as possible:

  • Don’t be tempted to borrow more than you have to
  • Try and keep the LTV% as low as you can by offering as large a deposit as possible. A lower LTV% means less risk to the lender which means they’ll offer you a lower rate
  • Work to make your credit rating as positive as you can – there is no instant fix for this
  • Ensure that any fees you have to pay are more than offset by a lower interest rate over the life of the deal
  • If you don’t want to risk repayments increasing then you should fix your interest rate. Or consider a capped rate deal. The length of the fix will be a judgement on your part, but you can discuss this with the broker
  • Choose a mortgage deal that allows overpayments. Then should you have months where you have more cash available you can speed up the process of repaying the loan. Just make sure you don’t have to pay for the privilege and then not use it.
Why shouldn't I accept the lender's standard variable rate (SVR)?

A lender’s SVR is their default rate – the rate onto which a customer is moved at the end of a fixed or discounted rate deal. SVRs are usually linked to the Bank of England base rate but as much as 5% more than it. It’s a variable rate which means if the base rate increases so does the SVR. The key things to remember are:

  • The moment you are about to be switched to the SVR is the moment you should look for a new mortgage deal.
  • There are bound to be much better mortgage deals than the SVR.

Simply accepting a lender’s SVR is a lazy decision! Don’t do it.

Will moving home affect my credit rating?

The short answer is yes. This is simply because you will probably be borrowing more than before. But keeping up repayments on this larger mortgage will gradually improve your rating as it would with any other form of credit.

What if I am not accepted for a new mortgage?

If this happens then you will not be able to move house. You will need to address whatever it is in your credit file that is causing this, or if the reason is affordability you will need to consider borrowing a smaller amount.

Do I have to be able to provide a deposit when I move home?

Yes, but when you sell your current home and pay off the old mortgage you can use the surplus as the deposit on your new home. The larger your deposit as a proportion of the new home price the lower the LTV% and the lower the mortgage interest rate that you should be able to get.

How long will it take to organise a new home mortgage?

Typically you should budget four to eight weeks to get a new mortgage in place. However, you can start to organise this well before you need to move home and lenders are prepared to keep a mortgage offer open for an extended period. So, you could have your mortgage offer (in principle) in place while looking for your new home.

What are the current stamp duty rates?

The current rates of stamp duty (exc. first time buyers) are as follows:

Up to £125,000Zero
The next £125,000 (i.e. £125,001 to £250,000)2%
The next £675,000 (i.e. £250,001 to £925,000)5%
The next £575,000 (i.e. £925,001 to £1.5 million)10%
The remaining amount (i.e. above £1.5 million)12%

 

However, as a response to the Covid-19 pandemic, the UK Government implement a stamp duty discount for property bought between 8 July 2020 and 31 March 2021:

Up to £500,000Zero
The next £425,000 (i.e. £500,001 to £925,000)5%
The next £575,000 (i.e. £925,001 to £1.5 million)10%
The remaining amount (i.e. above £1.5 million)12%

 

To check how much stamp duty you will pay on your new property use the UK Government’s calculator.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. THE ACTUAL RATE AND FEES CHARGED WILL DEPEND ON YOUR CIRCUMSTANCES. ASK FOR A PERSONALISED ILLUSTRATION.

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Written/Reviewed by: Amanda Gillam