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Increasing mortgage now to buy bigger house next year?

(5 Posts)
SoupTroupe Thu 21-Sep-17 17:10:57

Sorry I don't think I'm going to explain this very well but we're planning on moving next year to a larger house and would need to increase the mortgage to do this.

Our current fixed rate mortgage has finished, would there be any benefit to increasing our mortgage (or is it even possible?) to enable us to move next year by 'just' porting our mortgage - this is so we can fix the interest rate before they might rise?

If this is possible I understand the downsides would be the danger of not moving so essentially we'd just have an expensive loan/When moving we'd still have to be reassessed for the mortgage when porting (but I believe we'd still be entitled to the same interest rate if accepted) also the bank would have to accept the new house is ok to cover the loan.
So, if you can make any sense of that, is it possible? And are there any other problems with this we should be considering? TIA

JoJoSM2 Thu 21-Sep-17 17:18:33

If you try with your current bank, they might view it as additional borrowing. So it might be necessary to remortgage with a new bank and release the equity. Something to look out for is your loan to value. Say, you're mortgage is 100k on a 200k house (50% LTV). If you take out a bigger mortgage now, say 150k, then your LTV will be 75%pushing your interest rate up. You then move to the new house worth 300k - your LTV is back to 50% but you're stuck with a rubbish rate based on 75% LTV...

Is moving now not an option?

SoupTroupe Thu 21-Sep-17 17:24:22

Thank you for your quick reply! We really can't move until next summer at the earliest due to my husbands job unfortunately, it's bad timing as well now be paying more for our mortgage as we can't fix for 1 year (I'm also keen to fix for a few years) but that's a good point about the ltv when moving, I hadn't considered that.

Moanyoldcow Fri 22-Sep-17 15:15:39

Just fix it now. Then port the fixed amount over and get additional borrowing for the excess. This is what we did when we moved - went from £185k mortgage to £275k

Vic98765 Wed 27-Sep-17 15:48:08

Don't forget the huge cost of actually moving house. Stamp Duty for example is massive now - this tells you

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