Deposit when second time buyers

[cupoftea84]

Hoping that MN can answer a house buying question ....

When I bought my first house I paid the solicitors the deposit when we exchanged contacts. I understood I lost this if I pulled out after exchange.

We're currently overpaying our mortgage by a small amount. I'm wondering if we'd be better off putting it in savings. My concern is if we want to move house, do we have to pay a deposit on exchange? Most of our savings will be tied up as equity in the house and the deposit would come from that but how's it work if you can't pay it on exchange?

Thanks

The equity in your old house is your deposit for your new house, say you have enough equity for 25%, you then either up your old mortgage or take out a new one.

I was confused by that too, but if you are in a chain then only the bottom rung needs to give the deposit in advance. It is fine for your deposit to be tied up in your current property.