House sale and fixed term mortgage
Discussion
Looks like I'm going to sell my house this year. Probably some time in Q3. I'll be moving to rented accommodation in the short term (self-build happening in 2021) so won't be porting the mortgage to another property.
My current 2 year mortgage deal expires at the end of June and I'm planning to let it default to the standard variable rate. That will mean I'll have an increased mortgage payment for a few months but no early repayment charge to deal with. Current standard variable rate is 4.19%, so will be quite a jump.
Alternatively, I remortgage with another lender (will need a deal with no ERC) for a short period of time and then pay it off when the house is sold.
Any ideas about the best approach here? Or something creative that I haven't thought of.
My current 2 year mortgage deal expires at the end of June and I'm planning to let it default to the standard variable rate. That will mean I'll have an increased mortgage payment for a few months but no early repayment charge to deal with. Current standard variable rate is 4.19%, so will be quite a jump.
Alternatively, I remortgage with another lender (will need a deal with no ERC) for a short period of time and then pay it off when the house is sold.
Any ideas about the best approach here? Or something creative that I haven't thought of.
Edited by mcbook on Wednesday 29th January 14:43
It depends on how big the mortgage is, but for something normal sized I suspect the upfront cost and hassle of remortgaging is going to be greater than the increased interest cost for a few months. Think upfront fees, solicitors, brokers etc.
If you aren't self-building until next year, would it make sense to keep hold of the place, remortgage to BTL, get a tenant in to generate some yield and sell when you are ready to start on the next project?
If you aren't self-building until next year, would it make sense to keep hold of the place, remortgage to BTL, get a tenant in to generate some yield and sell when you are ready to start on the next project?
See if your existing provider has any fee free tracker mortgages with no ERCs?
That's what I did in your situation (via a mortgage adviser) earlier this month. I'd anticipated having to stump up for a few months of much higher mortgage payments but my monthly mine is only increasing by around 5% (rather than c.30% if it had reverted to the standard variable rate).
That's what I did in your situation (via a mortgage adviser) earlier this month. I'd anticipated having to stump up for a few months of much higher mortgage payments but my monthly mine is only increasing by around 5% (rather than c.30% if it had reverted to the standard variable rate).
NickCQ said:
It depends on how big the mortgage is, but for something normal sized I suspect the upfront cost and hassle of remortgaging is going to be greater than the increased interest cost for a few months. Think upfront fees, solicitors, brokers etc.
If you aren't self-building until next year, would it make sense to keep hold of the place, remortgage to BTL, get a tenant in to generate some yield and sell when you are ready to start on the next project?
Interesting thought but I need to release the equity to pay for the plot.If you aren't self-building until next year, would it make sense to keep hold of the place, remortgage to BTL, get a tenant in to generate some yield and sell when you are ready to start on the next project?
mackay45 said:
See if your existing provider has any fee free tracker mortgages with no ERCs?
That's what I did in your situation (via a mortgage adviser) earlier this month. I'd anticipated having to stump up for a few months of much higher mortgage payments but my monthly mine is only increasing by around 5% (rather than c.30% if it had reverted to the standard variable rate).
Good shout. Will look into this.That's what I did in your situation (via a mortgage adviser) earlier this month. I'd anticipated having to stump up for a few months of much higher mortgage payments but my monthly mine is only increasing by around 5% (rather than c.30% if it had reverted to the standard variable rate).
mcbook said:
Upon checking, my current lender does a no-fee tracker at 2.89% with no ERC. Seems like it fits the bill.
Having said that, might have a chat to a broker too. There is also the self-build funding to discuss...
You mentioned raising funds out of the current property................they will decline you when you tell them that it's to buy a plot of land and you will be moving out of their security address..............Having said that, might have a chat to a broker too. There is also the self-build funding to discuss...
Sarnie said:
You mentioned raising funds out of the current property................they will decline you when you tell them that it's to buy a plot of land and you will be moving out of their security address..............
I'm selling my current house to access the money to buy the plot, not borrowing against it. The new mortgage will be of the self-build variety.
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