To buy a house with recently renewed mortgage?

[Bbbfurever]

I’m here for opinions in case I am missing something: essentially we renewed our mortgage contract for 2 years last Jan. However, since then, we’ve had a change in our circumstances and would like to move to a new area. This isn’t a must to do so now but as it happens, a lovely house has come up on the market and it feels like we might miss out if we don’t put an offer in now. My understanding is the main downside to securing the house now is ERC. Although it would be idea to wait till closer towards end of our contract, I feel you don’t always come across the right house! TIA xx

You can often port a mortgage to a new house without incurring an ERC

Like pp says - for most lenders it's fine to do this. You keep your existing mortgage, no ERC, it's just secured on the new property instead, and take out a second mortgage to cover any difference in price between what you get for the existing house and what you pay for the new. It costs a little more in admin fees but nowhere near the hit of the ERC.

Assuming your existing deal is portable (most are), you'll apply for additional borrowing to cover the cost of moving.

One decision you'll have to make is whether to take this without a deal, so when your existing mortgage expires, you can remortgage it all onto one account, or sign up to a fix on the additional borrowing, so going forward you might have to remortgage each portion separately.

Which is best would depend on how much extra borrowing you need. Of course, if this isn't a huge amount, there could be other ways of financing the move open to you like using savings or a personal loan and then just port your existing mortgage as is.

Thank you all for your advice!

@Bjorkdidit sorry, just to clarify I understand - so do you mean any mortgage without a deal can be combined with another non-fixed mortgage?

You port your existing deal. Then anything extra you borrow you need a new deal for.

That means when you are in the new house you will have 2 mortgages with different end dates. You can leave them like that with the same lender but if you want to remortgage in the future to a new lender (when the first deal expires) you will have an ERC on one of your deals. Either that or make sure your new deal has no ERC, eg some trackers.

When we did it we borrowed the new tranche of mortgage on a tracker deal with no ERC. Then remortgaged both deals to a new lender when the first 2 year deal came to an end.

Speak with a broker who will be able to help and advise, it is confusing!