I’ve hopefully moving to a new house and just got a question on financing it.

Present mortgage is on fixed rate until November this year. It’s also an offset but I don’t think that’s particularly relevant to this.

We need to take out some additional mortgage to pay for the new house which is more expensive plus some extra for fees and some building work we’ll want to do.

The current BS are happy enough to lend what we need on a rate that sounds competitive (without being the best) but it’ll be a separate loan/mortgage on 2/3/5 year terms which then means we’ll be out of sync with the main mortgage and liable over time to pay fees each time we want to get new deals on either loan amounts unless we stick on SVR with one until the other one comes up for renewal.

Given that we’re less than 6 (by the time we actually move) months away from the renewal for the existing mortgage, any suggestions for ways to get the extra money in the interim? Standard loan rather than mortgage? (Our offset savings account isn’t enough to cover the full amount we want without leaving us with very little spare if we had an emergency)

Any other options I’m missing? I could exit the current mortgage early for approx £5k but I don’t think that doing that will add up as the best interest rates out there aren’t that much better than what’s on offer.

It looks like you understand what is available to you, but unfortunately the only way to really know the difference in the amount you will pay over a number of years is to sit down with a spreadsheet and work through each of your options over different periods. And then to take into account how quickly you are to likely to pay off the loans (i.e. will you over pay?). I would think in almost all circumstances, exiting your current mortgage would be more expensive than just obtaining your new mortgage with no exit fee (at a slightly higher APR) and combining the mortgages (assuming your circumstances don’t change) when you can do so without any exit fees.

Whether or not you can obtain an unsecured loan for the ‘new’ bit of the mortgage and whether or not you are willing to hold off doing the building work until you can rearrange all of your loans together very much depends on your personal situation.

Although the difference in APR between the SVR and fixed mortgages can look significant (5% APR versus 1.8% APR), when you take into account the extra fees for ‘buying’ a fixed rate mortgage and the subsequent exit fees, we decided it wasn’t worth it for our situation (we were thinking we might have to sell up during the fixed period and for the sake of, at most, a few hundred quid it was easier to stay on the SVR).

Yeah, I think I’m clear on the options and I’ve calculated all the total and monthly costs but I really want to check that I haven’t missed something that might be better.

Typical. Found the house we want about five months too early. Would have worked nicely if we’d been moving just after the current deal ended.

Well I was in a similar situation years ago and just got the closest tie in period mortgage I could to fit in with the existing one but you can’t get a 1 year one? So maybe you need to get a 2 year one then switch the other to 2 years when it expires then have a period on SVR to sync them up. I suppose you could always carry on with 2 seperate ones but liekly to not be so cost efficient when it comes to set up fees.

Yeah, both on 2 years fixed seems like the best option at present though I had been considering a longer tie in for the main mortgage which isn’t really an option this way unless I make the decision right now.

Actually, one other question. Can I take out the extra mortgage with another lender? (so I’d have the main mortgage with on lender, the extra amount with a different one) The comparison sites never seem to have an option for this so it’s hard to tell what kind of rates I’d be able to get, if at all.

Unfortunately it looks like you can’t have two mortgages with different lenders on the same property, because of the legalities of who owns the property: article. A good reason to try to find a no fee or no ‘initial period’ mortgage so you don’t pay exit fees.

Thanks for that KG – I figured that was likely

I am a bit confused. Are your current lenders going to transfer your existing mortgage to the new property? Is it not deemed to be a new purchase and so wouldn’t you be exiting the current fixed mortgage anyway?

The existing mortgage transfers over to the new house.

The extra you need … How much? for how long?

If it’s not “that much” and the time scale is say 3/2/1?? months after completion of your move to ending of the old mrtgage fixed term

Then maybe, just maybe, a personnal loan may work ??

Wonga? 🙂

Trouble is that I’d need to take out a loan on a term to match the mortgage (eg 15 years remaining) otherwise the monthly payments would be silly but I’d then need to pay it back early (eg when the main mortgage is up for renewal) which seems to mean an early repayment fee on the loans I checked on.

How much are the cancellations fees for the fixed one you’ve got now?

Might be worth stumping up to get yourself onto one decent rate.

EDIT: Sorry, spotted the £5k fees – does sound a bit steep!

Well it’s roughly the going rate but it does skew any calculations towards staying with the existing lender.