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Original poster

How best to do this in the cheapest way?

35 replies

ROYGBIVain · 05/12/2024 22:59

I took out a fixed rate 1.39% mortgage in 2021, it expires in 2026. I have 62k left to pay. I won’t be able to afford the hike when my fixed rate ends, and frankly would rather spend the extra on nice things in life rather than exorbitant mortgage interest. If I want to move to a cheaper house that frees up some equity but pays off the mortgage exactly by Aug 2026 (current provider will let me port) how would I calculate this? I pay £520 a month currently for my mortgage.

Or would anyone advise a different route and why? One of the estate agents I had round last week said I was still young enough to take on a bigger mortgage (I’m 46 and working with a child) but I haven’t really got my head around paying such a huge hike in the monthly mortgage if I have to get a new deal in 2026.

OP posts:

TarantinoIsAMisogynist · 07/12/2024 14:25

ROYGBIVain · 05/12/2024 23:51

Thanks all. Tbh I am not sure exactly what it will go up by, but from using the calculator on Zoopla when looking at houses etc I’m expecting it to double - am I so wrong??

Id really like to move anyway. This house and garden is too much maintenance for me and I’m tired of having to do it since becoming a single parent. Plus really want a kitchen diner where dc and I can be together in the evenings and not diff parts of the house.

Zoopla is not where you should be looking for info about yout future mortgage payments!

Check out a mortgage comparison site, or go to the websites of a few mortgage providers, input your details (approx house value, amount you need to borrow, term) and see what they say. £62k is not a big mortgage, so your LTV is likely to be low, which will work in your favour!

Moving house is very expensive, so it's highly unlikely to save you money. It seems that you want to move for other reasons, but don't go into it expecting that it'll make life cheaper. Legal fees, EA fees, stamp duty etc. all add up. And when you move into a house it's likely you'll want to make some changes even if they're only cosmetic - paint, curtains etc. This all costs money.

TarantinoIsAMisogynist · 07/12/2024 14:33

Jmaho · 06/12/2024 19:49

I'm a bit confused over what you're trying to achieve. Your initial post suggested you wanted to be mortgage free in a cheaper house
However if you sell yours for £270k once you've paid back the £50k left on the mortgage you'll have £220k. Then you want to pay off credit cards and buy a car then you'll have to pay stamp duty and fees. You'll end up with a mortgage not far off what you've got now except you'll be in a cheaper house?
You'll still have the issue over it going up when you change rates but you are worrying about the increase a bit too much. It won't double

I agree. The plan the OP has set out leaves her in a cheaper house, with the same mrtgage, but having spent a load of money on fees, moving costs and stamp duty. Financially it doesn't make sense, and it seems like an overreaction when the OP's mortgage isn't actually going to go up by that much.

JollyHollyMe · 07/12/2024 14:37

I ported mine recently. I pay the same mortgage but for a house worth £1million less (ie the mortgage amount didn't reduce for the term of the mortgage and it is a 100% mortgage on the new house )

notatinydancer · 07/12/2024 14:44

@ROYGBIVain if you house sold for £270 you wouldn't get that to buy a new house /car/holiday etc.
you'd still owe about £50k in two years so you'd get £220

Then you'd need to buy a new house , and all the fees etc.
I really don't think you'd be any better off.

Igmum · 07/12/2024 14:56

Your mortgage is so small the hike won't be massive and it should soon be paid off. Moving house will cost you tens of thousands in solicitors, stamp duty, removals etc. if you actually want to move then move, but with £62k left the majority of your repayments will be principal rather than interest and will be paid off quickly.

WoodsBroker · 09/12/2024 10:50

I'm a mortgage broker, a lot of clients are worried about the payments going up. From the figures you've posted I could think of a few ways to reduce the monthly payment beyond just extending the overall term.

Happy to go through things in detail if you are happy to DM me your email address.

QforCucumber · 09/12/2024 10:56

The increase will be nowhere near what you're thinking as PP have said,

We're currently on 2.39% - paying £700 a month on 150k.
About to fix again at 5.33% - will be paying £913.

We're fixing for 5 years as need to be able to budget properly with nursery fees and other things we have commitments for at the moment, but hoping in the 5 years that'll come back down to around 4 ish % and give us some breathing space.

Pottedshrimpy · 09/12/2024 11:10

Op when you move the mortgage is repaid on the current house and that mortgage ends. If you sell for 270k but still owe the mortgage company 50k you will get 220k into your bank account.

Then you start afresh with a new mortgage and a new house. 220k - 30k for fees/solictors/pay off debt/new car/holiday (could be more than 30k though) leaves you with a deposit for a new house of 190k. If your new house costs 250k then you’ll have to get a mortgage for 60k.

So you’re in a smaller house with the same mortgage amount. Will depend on rates as to how much that costs per month.

custardpyjamas · 09/12/2024 11:19

If you actually want to move (and it seems you do) then look around to see if you can get what you want in a cheaper house in an area you like, it might not be so easy to find something. Mortgage rates may be quite different by 2026 so keep an eye on that too, although as explained above a lot of your payments are now capital.

marmaladeandpeanutbutter · 09/12/2024 12:15

If you're trying to release £20k , you'll likely spend a lot of that moving.

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