Homemover
Navigating Your Next Move: A Comprehensive Guide to Home Mover Mortgages
Moving home is undeniably an exciting chapter in life. It's a time filled with positive anticipation – the thrill of discovering new houses, the charm of exploring unfamiliar local areas, and the joy of selecting new furnishings to make a space your own. However, these enjoyable aspects can often feel overshadowed by the more complex and potentially stressful elements, particularly when it comes to arranging your finances. Securing a mortgage, especially if your circumstances involve unique requirements such as needing a non-standard construction mortgage for an unconventionally built property, or financing for a specialist property type like a home like a listed building, can add a layer of complexity to the process.
Whether you're contemplating the possibility of transferring your existing mortgage deal to your new property – a process known as ‘porting’ – or you're keen to explore the market for a brand new mortgage agreement that might offer better terms or a lower interest rate, our team of Specialist Mortgage Advisers is dedicated to providing you with comprehensive support and expert guidance every single step of the way.
Why Re-evaluate Your Mortgage When Moving?
Moving house presents a prime opportunity to critically reassess your current mortgage. It's a chance to determine if the deal you secured previously still aligns with your financial goals and the prevailing market conditions. Whether your move is driven by a desire for a different location, the need for more space as your family grows (upsizing), or a decision to move to a smaller, more manageable property (downsizing), securing the right mortgage is paramount.
This is a significant life-changing decision, and the mortgage you choose will have a long-term impact on your finances. Therefore, it’s crucial to ensure it's the most advantageous and appropriate one for your specific situation, whether you're purchasing your forever dream home, making a strategic move up the property ladder, or simplifying your lifestyle. Even if you've navigated the mortgage landscape before, perhaps when securing your first-time buyer mortgage, the added dimension of selling your current home whilst simultaneously purchasing another can introduce new complexities and potential stresses. Rest assured, our primary goal is to streamline this process for you, making it as straightforward and stress-free as possible.
Preparing Your Finances for a Smooth Move
Before diving into property viewings, it’s essential to ensure your financial house is in order. This foundational step involves developing a clear understanding of your current mortgage, including the outstanding balance, the remaining term, your current interest rate, and any potential early repayment charges (ERCs) that might apply if you decide to switch lenders or pay it off early. You also need a comprehensive overview of any other outstanding debts, such as loans or credit card balances, and a precise picture of your regular income from all sources. Furthermore, establishing a detailed budget, meticulously tracking your monthly incomings and outgoings, will provide you with a realistic view of what you can comfortably afford for your new mortgage repayments and other associated moving costs.
Our Commitment: Finding the Optimal Deal for Your Circumstances
At Mortgage Winners, we take immense pride in our ability to secure mortgage deals that are precisely tailored to your individual needs and current financial situation. The mortgage market is dynamic, and what may have been the most suitable or competitive option when you initially took out your mortgage might not be the best choice for you today. Therefore, we approach each home mover’s situation with a fresh perspective. We start from scratch, conducting a thorough assessment of your current circumstances, your future aspirations, and the prevailing market conditions to ensure your new mortgage aligns perfectly with your evolving needs.
Think of it in the same way you’d periodically shop around for more competitive rates for your energy bills or car insurance. Your mortgage is likely your largest financial commitment, so it makes even more sense to ensure you’re not paying more than you need to. We have access to and can meticulously search through thousands of mortgage deals from more than 90 lenders, including high-street banks, building societies, and specialist lenders. This comprehensive approach allows us to identify the right mortgage product with the most favourable terms for your unique circumstances.
Understanding Homemover Mortgages in Detail
A homemover mortgage (also commonly referred to as a ‘purchase mortgage’ or a ‘moving home mortgage’) is specifically structured for individuals who already own a property and are in the process of purchasing a new one. This financial product facilitates the purchase of your new home while strategically utilising the equity you've accumulated in your current property. Equity is the difference between your current home's market value and the outstanding amount on your existing mortgage. This equity can often form a substantial part, or even all, of the deposit for your new home.
Typically, the sale of your existing home will need to be completed, or happen simultaneously, with the purchase of your new property. The funds generated from this sale are then allocated to several key areas: firstly, to fully repay your existing mortgage; secondly, to cover any associated selling costs (like estate agent fees and legal fees); and thirdly, the remaining equity is then put towards the purchase of your new home. Homemover mortgages are available with a diverse range of interest rate options (such as fixed rates, variable rates, tracker rates) and varying repayment terms, underscoring the importance of thoroughly comparing offers to find the most advantageous deal tailored to your specific financial profile and preferences.
In essence, a ‘homemover mortgage’ is a tailored home loan that assists existing homeowners in financing the purchase of a new property while concurrently managing the sale of their current one. This is particularly common for those looking to “move up the property ladder,” aspiring to a larger or more valuable home. The mortgage allows them to secure the necessary funds for the new purchase, factoring in the financial advantage of the equity built up in their present home.
Home-mover mortgages are offered in various forms to cater to different risk appetites and financial planning strategies. These include:
- Fixed-rate mortgages: Where the interest rate remains the same for a set period (e.g., 2, 3, 5, or 10 years), offering payment certainty.
- Variable-rate mortgages: Where the interest rate can fluctuate according to the lender's standard variable rate or changes in the Bank of England base rate. This can mean payments go up or down.
- Tracker mortgages: These typically follow (track) the Bank of England base rate at a set margin above it.
Each type comes with its own set of terms, conditions, and potential fees. The most suitable choice will depend heavily on an individual’s financial stability, attitude towards risk, and future plans. These mortgages are the standard financial tool for anyone relocating, upsizing to accommodate a growing family or desire for more space, or downsizing for reasons such as retirement or reduced living costs.
Porting vs. New Mortgage: Making the Right Choice
A key question you'll likely face is whether it's more beneficial to ‘port’ your existing mortgage (transfer it to your new home) or to pay off your current mortgage and secure an entirely new deal. This decision can be surprisingly complex, with a multitude of factors influencing the most advantageous course of action. It's not solely a numbers game; your long-term plans, current financial health, the specific terms and conditions of your existing mortgage (including the interest rate and any early repayment charges), and the features of available new deals all play a critical role.
Here are the primary options to consider:
Keep your existing mortgage (Porting):
Many mortgage products are ‘portable’. This feature allows you to effectively transfer your current mortgage deal, including its interest rate and remaining term, from your existing property to your new one. This can be an attractive option if you have a particularly favourable interest rate that is no longer available, or if you want to avoid potentially hefty early repayment charges (ERCs) for exiting your current deal prematurely. However, you will still need to meet the lender's affordability criteria for the new property.
Keep your current deal and borrow more (Porting with a top-up):
If your current mortgage is portable but you need to borrow additional funds to purchase your new, more expensive home, you can often transfer (port) your existing mortgage amount and interest rate, and then apply for a ‘top-up’ loan from the same lender for the extra amount needed. This top-up portion may be on a different interest rate and term than your ported amount.
Pay off your existing mortgage and get a new one (Obtaining a mortgage with a new lender):
This option involves settling your current mortgage entirely upon the sale of your home and taking out a completely new mortgage for your new property, potentially with a different lender. This might be the best route if your current mortgage isn't portable, if you can find a significantly lower interest rate or more favourable terms elsewhere, if your borrowing needs have changed substantially, or if your existing mortgage has a very small early repayment charge (or none at all).
While it might seem convenient to remain with your existing lender, especially if you've had a positive relationship and are satisfied with their service, it's crucial to remember that the mortgage market is competitive. Using your home move to thoroughly explore options from different lenders can unearth deals that could lead to substantial savings on interest payments and overall costs throughout the lifetime of your new mortgage.
Download Our Guide!
Moving to a new home is a big step, full of excitement and, let's be honest, a lot to manage! To help your move go as smoothly as possible, we've put together a comprehensive Homemovers Guide. Dive in to find practical tips and insights to navigate every stage of your relocation with confidence and make settling into your new place a breeze.
Your Partners in Your Home Moving Journey
At Mortgage Winners, our specialism lies in identifying and securing the most suitable and competitive mortgage options for home movers across the entire UK. We are committed to making your transition as smooth and financially sound as possible. Take the first step towards your new home by scheduling a no-obligation conversation with one of our experienced specialists today. Let us help you navigate your homeownership journey with confidence.
We believe in being transparent, so we want to tell you that…
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is £195.