Moving Home Mortgage

There are many things to consider when you’re moving house – including what to do with your current mortgage.

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Find out what mortgage deal you could get when moving home

There are many things to consider when you’re moving house – including what to do with your current mortgage.

While some people are fine transferring their current mortgage deal to the new property, others wonder whether applying for a new one is best.

There’s no one mortgage deal fits all solution here, but as a loans broker, we specialise in helping people find the right borrowing solutions for their unique circumstances.

What are the primary options when moving home?

You can move home at any point and don’t need to pay off your existing mortgage before doing so. Most lenders allow someone to transfer their current mortgage over to the new property – also called porting.

However, some homeowners find they’re better off looking for a new mortgage deal – especially if it allows them to save money and secure better interest rates.

Let’s explore some of the most popular home mover mortgage options.

Porting

Porting your mortgage is one of the easiest ways to move house because all you need to do is transfer your current deal to the new property. Staying with your existing lender is less stressful because you won’t have to go through an extensive application process.

There’s still an application process, and your lender must approve the mortgage if you need to borrow more.

Your lender might also introduce higher interest rates and stricter terms, so it’s always a good idea to discuss your options before making a decision.

Using the same lender but getting a new mortgage

Another popular option is to stick with your current lender but apply for a new mortgage.

Many people do this because they want to secure better interest rates and repayment terms, which is possible due to the relationship you’ll build with the provider during your initial mortgage term.

However, if you leave your current mortgage, you might have to pay a fee to switch to a new deal. A way to get around this is by being on a lender’s standard variable rate; so it’s essential to look at your agreement before making decisions.

Finding a new lender

If you want a clean break from your lender or cannot find the right deal, switching to a new mortgage provider can give you more flexibility.

Some lenders might offer lower monthly payments or a fixed rate agreement, which gives you more stability during repayment.

However, your new mortgage will come with arrangement fees, and you might have to pay an exit fee to your current provider.

Things to consider before moving home

Before committing to a new mortgage or changing your current deal, you should consider whether it’s the right option for your financial situation. You’re entering into a binding legal agreement, and any defaults on your loan could severely affect your credit report.

Here’s what you should think about before moving house.

Property valuations make a difference

Property valuation or purchase price will make a difference to your mortgage options. The three common factors that define your choice of mortgages include higher valuations, downsizing the property, and homes losing value.

Moving to a larger property

Many families move to larger properties to facilitate their growing space needs. To buy a bigger home, you’ll need to consider the higher mortgage rates and payment amounts.

Also, your lender will want to know if you can afford the mortgage, which could cause problems if your income has decreased or monthly outgoings change.

Downsizing

Downsizing is a popular option for retirees who no longer need multiple bedrooms. The great thing about downsizing a property is that you can save a lot of money and have fewer eligibility criteria to meet.

Also, if you have a lot of equity in your current home, you can avoid getting a new mortgage altogether.

Do you have negative equity?

Unfortunately, house prices and valuations are subject to the property market. If the economy is in bad shape, properties will lose value, which means you could deal with negative equity.

Negative equity occurs when the value of a property falls below your mortgage amount. For example, imagine a property had a purchase price of £250,000, and your mortgage deal makes up £200,000; your equity is negative if the property value falls below £200,000.

Many households in the UK have this problem, which can impact the mortgages you’re entitled to and your affordability.

Which mortgage types are available?

All mortgages have terms and repayment conditions, but the one you get entirely depends on your provider.

Standard Variable Rate Mortgage

Mortgages with a standard variable rate are subject to fluctuations in base rates. You might start on a lower initial interest rate, but this could change if the lender’s base rates increase.

Fixed-rate mortgages

These mortgages are highly popular, as they ensure you’ll pay a set amount each month over an agreed term. For example, your fixed term might last five years, and then you’ll move on to an SVR agreement.

Tracker mortgages

A tracker mortgage is subject to changes with the Bank of England’s base interest rates. If those rates go down, your repayments will follow. But if they increase, you’ll have to budget more each month.

Is an interest-only or repayment mortgage better?

The most common types of mortgages are repayment and interest only. Each has its advantages, but that doesn’t necessarily mean you’ll have access to both options.

Repayment mortgage: Most people are on repayment mortgages, as they’re the more common arrangement. You’ll pay off a chunk of the loan alongside the interest rates each month.

Interest-only mortgage: These mortgages are rarer, but some providers offer them. Instead of paying off the loan, you pay the interest rate only. You’ll have to pay the outstanding amount when you want to exit the mortgage.

Mortgage fees

Changing your current mortgage or switching to a new provider will inevitably incur some fees, but these vary between providers and depend on your circumstances. For reference, these are the costs you’ll need to factor into the mortgage application.

Early repayment charges

If you’re switching to a new mortgage, you’ll need to pay off the current one. The early repayment fees will be in your initial contract, but the redemption charge usually costs up to 5% of your debt.

Exit fee

An exit fee will sometimes apply, covering the administration required to stop your mortgage. Luckily, the amounts are usually relatively small and won’t interrupt your other financial commitments.

Valuation fee

Your lender will also want to see if the property is worth the price advertised. Nobody wants to loan money if they feel the property’s value will decrease, so the valuation might impact how much you could borrow.

Arrangement fee

As you can imagine, numerous fees are involved with arranging a mortgage. However, home mover mortgages don’t have a set amount, so discussing the arrangement fee before signing anything is essential.

Broker fee

Mortgage advisers work to find you the best terms for your needs and can help you access some great deals. While some charge upfront fees, others will add them to your mortgage repayments, so you won’t have to worry about any financial implications.

A professional broker could find the best moving home mortgage for your needs

At Believe Loans, we make it our mission to find the best loans for you – no matter your financial circumstances. As a professional brokerage, we take your situation and source a mortgage agreement in principle.

Here’s what our dedicated team can offer you.

A range of moving home mortgages

We partner with some of the best providers in the UK, and many aren’t available in mainstream searches.

Whether you’re worried about a poor credit rating or having to pay an early repayment charge, our brokers will go out of their way to match you with the right lender.

You’ll also have access to self-employed mortgage providers or those specialising in interest-only mortgages.

Low monthly payments

Making repayments on your mortgage can be a significant financial burden, but our brokers work with providers who are more willing to negotiate. While mainstream mortgage providers have strict eligibility criteria, we’ll evaluate your case on personal circumstances.

Ultimately, our team will do their best to minimise your monthly repayments so you have peace of mind.

Zero upfront fees

We don’t believe in charging a lot of money upfront and will support you until the mortgage completion process. Once you begin your monthly repayments, we’ll add our broker charges to them so that you won’t be out of pocket.

Get a moving home mortgage today

There’s no time like the present to prepare for the future, and we’d love to help you secure a mortgage early. All prospective clients receive a free consultation, regardless of whether you choose to go ahead with the service.

Please don’t hesitate to contact us today and speak to a mortgage broker about your eligibility. In just a few minutes, you could be on your way to choosing a new home.

About Company

When it’s time to remortgage, getting the best deal to save money in the short and long term is often a main priority. Believe Money has access to hundreds of remortgage providers so whether you’re looking for lower interest rates, to release equity or consolidate debt into a remortgage, we work hard to get you the best remortgage deal.

We’re here to help you at every step of the remortgage journey. Contact us online or give us a call on 01302 591 360

Why Use Believe Money?

Believe Money is an award-winning finance broker dedicated to offering the best range of affordable loan options. Whatever your circumstances or credit rating, we’re committed to getting you the best secured loan interest rates by searching our entire panel of secured loan provides.

Whatever you need a secured loan for, we’re here to help. Our specialist advisors are available Monday to Friday, so if you need any help please contact us online or give us a call on 01302 591 360.