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can you remortgage without fixing?

(22 Posts)
Collywobbler Tue 16-Aug-16 13:33:21

My mortgage on my house is due for renewal in October but I don't want to fix as I am planning on selling next year. I probably won't be moving to a new house straight away as I will be buying with my partner and will have to wait until his house sells.
So, can I remortgage to get a better deal but without tying myself into any early redemption penalties?

I've had a quick look online and all the ones im looking at are tracker or fixed but both seem to have getout clauses/penalties before the term ends?

If I stick to the mortgage company I'm with now I will drop onto their variable rate which will cost another £100 or so a month - not ideal when I'm trying to save up for the new place!

Another question - if I sell my house and I don't end up buying a new one for another year or 2 what happens to the money, will I get taxed on any profit and ONLY the profit? I think I should make 5k profit max.

Sprig1 Tue 16-Aug-16 14:47:54

You will not be taxed on 'profit' when you sell your house if it is your only property and your main residence.
You would be best off speaking to a broker to see if they can find you a product without early redemption penalties that is worth switching to for such a short period of time (lots will have application/set up fees). London and Country always come recommended on here.

venys Tue 16-Aug-16 15:25:32

You will need to calculate any mortgages on offer if you pay off within a year. Sometimes it might be best going on the SVR (standard variable rate ) ie just sticking with your current mortgage. I think there is an HSBC lifetime tracker mortgage that doesn't have any ERCs but it has expensive fees. As pp said you shouldnt be charged capital gains tax on your main residence.

Ireallydontseewhy Tue 16-Aug-16 15:41:39

I've read on mn that instead of getting a new mortgage you can ask your lender for a new 'rate' on the existing mortgage. I don't know if that's possible in your case - not tried it myself - but other pps may have experience?

venys Tue 16-Aug-16 20:49:11

I know for a fact you can't get a new teaser rate on an existing mortgage with a couple of high street lenders that I used to work for. You have to take out a whole new product with whatever attributes are associated with it - some might have no ERCs but you would probably be paying a high interest rate or fees.

Gracey79 Tue 16-Aug-16 20:50:24

HSBC have a 75% ltv tracker no booking fee no erc

venys Tue 16-Aug-16 21:21:13

You could look at a current account mortgage or an offset mortgage. I remembered. Better if you have lots of equity in your own home. But all your pay goes into the account so you pay less interest. It's like a giant overdraft. Those tend not to penalise if paying off early.

Collywobbler Tue 16-Aug-16 22:30:36

Great thanks all will be looking at HSBC and offset then

Ireallydontseewhy Wed 17-Aug-16 08:55:55

That's interesting venys, i must admit i had never heard of lenders just reducing the rate on an existing mortgage before i read it on mn. It may depend on the lender i suppose.
If you get a new product from the same high street lender (ie big 4 bank) does that mean going through the whole underwriting process again - valuation, affordability assessment etc, as if it's a new transaction?

Collywobbler Wed 17-Aug-16 09:15:36

I dont know how it works for the rest of the banks but my current mortgage lender states that if you remortgage with them you don't have to go through all the affordability stuff again

Ireallydontseewhy Wed 17-Aug-16 09:27:42

Thanks cw - that's interesting, as I seem to remember when the "affordability" changes happened a couple of years ago people were finding that they weren't being accepted for 'new' mortgages with the same lender when they wanted to remortgage as they couldn't pass the new test - so had to go on to the SVR instead - which was higher and therefore less affordable!
But things may have changed over the past couple of years - in fact I think the ?FCA then said that that wasn't the intention of the changes, so lenders may have changed their policies.

wowfudge Wed 17-Aug-16 12:23:39

OP - look at a mortgage deal you can port to a new property. You will probably need a new mortgage product to cover the difference in value between the current and new places, so you end up with part of the mortgage at one rate and the rest at another, but it means no early redemption fees. Then you can go for the absolute best deal possible with your current lender now - you'll be tied to them for the new property though.

wowfudge Wed 17-Aug-16 12:29:14

Colly I've had the same in the past with Halifax - it's because you aren't borrowing any more money, just choosing a new deal for your current mortgage.

venys Wed 17-Aug-16 14:35:33

Wow fudge OP couldn't really port mortgage as she intends to not hold a property for a short period until she buys with partner. A mortgage always has to have a property as security. (But a good idea if there is no break). If you end up borrowing more by moving house, you take out a new product with the same lender for the difference. Interesting about no affordability checks. I am wondering if the valuations will start to be mandatory again as the property market slows and there is a risk of negative equity?

Collywobbler Wed 17-Aug-16 15:58:06

yeah that's the problem wowfudge - if I were going to another property straight away I would definitely take the mortgage with me but it might be anything up to 2 years before I move again (ill move in with partner in his house until his is sold).

I would have to take out a new mortgage with probably a new company as he is self employed contractor so we might need some specialist mortgage with a specialist broker for all I know - no idea I've never needed to look into it!

good news is though Santander are doing a 2 (ish) % mortgage with only £200 fees to pay if you exit before 2 years and no ERC so that's definitely something I'm hoping that will still be there by the time I come to remortage in a few months.

Ambivalence Wed 17-Aug-16 21:50:36

I was in this situation a year ago. My mortgage was with Barclays and I knew I was moving soon. I did a "rate switch" , 5 Minute phone call. No checks but I think there was still an arrangement fee...

Ireallydontseewhy Thu 18-Aug-16 08:22:34

Ambivalence that is very interesting - were you on an 'introductory rate' that then expired so you would have gone onto svr? Did you just have to phone and ask for a new rate?
Mind you practices/rules seem to change quite frequently. I thought i had read that lenders now have to do affordability checks for remortgages, but perhaps that is not the same as a 'rate switch'?

onemouseplace Thu 18-Aug-16 11:47:07

We're with Barclays as well and the last couple of times we've "re-mortgaged" we've just done a rate switch. Really easy, no re-valuation or affordability checks.

Then what your position is will all depend on the products available. We knew we wanted to move in 2-3 years, so chose one which had a discounted rate for 2 years, then a really low follow on rate for when we are looking to move. We did have to pay an arrangement fee though, but took that into account when costing the whole thing up.

Ireallydontseewhy Thu 18-Aug-16 13:09:16

Thanks omplace, that sounds much simpler than I'd thought! Are the new rates offered roughly on a par with the old rates - obviously depends on the precise mortgage I know! but are they in general not that much higher than what you've got?

AlbusPercival Thu 18-Aug-16 13:14:25

Colly - you can apply now for Santander, once it is all agreed you just delay completion until October, we are doing this at the moment for an October remortgage

Collywobbler Thu 18-Aug-16 14:24:27

Oh cool I didn't realise you could start so early thanks ill get onto them then

Eminybob Thu 18-Aug-16 14:30:36

Nationwide have a 2 year tracker with no early repayment charges and no fees

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