Got a tracker mortgage and want to move house, what to do?

[seismic22]

Hi all,

I generally keep an eye on this forum and thought there would have been a couple more posts like this come up by now but there doesn't seem to be so many yet.

Anyway, I have been making the most of having tracker mortgages for the last few years but this year whilst being busy with my 9 month old son, planning our September wedding and attempting a second season as a Classic Motorcycle racer, I have taken my eye off the ball and let my tracker drift into today's current climate.

My mortgage interest rate is now double what I was paying earlier in the year and reading between the lines, it seems there is every chance it could at the very least rise another 50% again in the near future. The problem is, part the reason we have remained on a tracker more recently is that upon completion on the renovation of our current house, we were looking to move to a property more suitable for a growing family in the next 24 months (realistically 18-24 months) and didnt want to be paying any early repayment fees that a fixed mortgage would have brought. I expected rates to rise but in my short-sightedness, not to the extent that they have and I figured whilst id be paying more interest the value of no ERC's with the tracker would still be of benefit and once moved, I'd fix and give myself some security then. This is clearly not now going to work and I am looking to fix at either 2 years or 5 years (5 year fix's are giving better rates than 2 year fix's at present).

I'm not sure what question I am asking here as it seems delaying moving and fixing is my only option and the conundrum is working out if a 5 year fix with a slightly better rate than a 2 year might help ease any pain of having to pay an ERC if we move after 2 years but inside 5. Most of you on here however appear far more experienced and knowledgeable of such situations than me and so I guess I would be just grateful of any advice anyone has that might help me see the woods from the trees or just confirm my existing thoughts......?

Thanks.

[Sarnie]

All UK mortgages are portable, so if you fix your rate you'll be able to port it to a new property without incurring any ERC's.

[Caddyshack]

Only speed read and don’t have my glasses on but you can fix now and port the fixed rate to a new house but I would expect the tracker you have to be a fair margin below fixed rates available today

[Caddyshack]

Ha, 2 brokers answering at the same time

[seismic22]

Thanks. I guess what i have been concerned about is that the value of the type of property we will be likely moving to will be notably greater than that we currently have a mortgage against and I have been concerned as to whether a lender would allow the porting of the mortgage. I guess it just depends if their affordability calculator thinks we can afford the new place.

[Sarnie]

seismic22 said:

Thanks. I guess what i have been concerned about is that the value of the type of property we will be likely moving to will be notably greater than that we currently have a mortgage against and I have been concerned as to whether a lender would allow the porting of the mortgage. I guess it just depends if their affordability calculator thinks we can afford the new place.

The lender will allow you to port your mortgage to the new property.

If you need additional lending then you would have to satisfy all of the normal lending criteria as you would expect.....

[seismic22]

Thanks. I guess what i have been concerned about is that the value of the type of property we will be likely moving to will be notably greater than that we currently have a mortgage against and I have been concerned as to whether a lender would allow the porting of the mortgage. I guess it just depends if their affordability calculator thinks we can afford the new place.

[Caddyshack]

seismic22 said:

Thanks. I guess what i have been concerned about is that the value of the type of property we will be likely moving to will be notably greater than that we currently have a mortgage against and I have been concerned as to whether a lender would allow the porting of the mortgage. I guess it just depends if their affordability calculator thinks we can afford the new place.

Correct. That isn’t sporting issue unless the current lender will not lend as much as a new lender at that time. A broker can tell you which lenders typically lend the most for your given circumstances (which could change)

[colin79666]

Caddyshack said:

Correct. That isn’t sporting issue unless the current lender will not lend as much as a new lender at that time. A broker can tell you which lenders typically lend the most for your given circumstances (which could change)

Also you can get locked into that lender for the additional borrowing, which will be at their rate at the time. It can work out well for you but ending up with 2 mortgages on a property with different fixed periods means more hassle and potentially more fees down the road.

[Caddyshack]

colin79666 said:

Caddyshack said:

Correct. That isn’t sporting issue unless the current lender will not lend as much as a new lender at that time. A broker can tell you which lenders typically lend the most for your given circumstances (which could change)

Also you can get locked into that lender for the additional borrowing, which will be at their rate at the time. It can work out well for you but ending up with 2 mortgages on a property with different fixed periods means more hassle and potentially more fees down the road.

Yeah, I prefer to do the extra top up on a deal with no erc, if possible so when the original fixed ends you can move the whole lot.