What happens if I want to move home, without selling my current home?

Your home may be repossessed if you do not keep up repayments on your mortgage.

Most Buy to Let Mortgages are not regulated by the Financial Conduct Authority.

All information was accurate at the time of publication.

7th May 2024

I was recently approached by a lovely family who had found the perfect street they wanted to move to and they were just waiting for a property to become available. Luckily for them their dream home came to market, but they got in contact with myself when they realised they were tied in to their current mortgage and had a penalty if they left before the fixed rate ended.

Found your dream home? That's fantastic! But if you already have a mortgage, moving can seem a bit tricky. Don't worry, I can help! The sooner you chat with me, the easier it will be to figure out everything.

Some lenders, such as Barclays, Nationwide and NatWest will allow me to log on to their portal and it will show the details of your outstanding mortgage. This lets us see what you still owe, your current interest rate, and when it expires. We'll also check for any early repayment charges if you need to switch mortgages sooner.

We can then look at porting the mortgage to your new home.

Imagine your mortgage as a comfy backpack. When you move to a new place, porting lets you take that backpack (your mortgage) with you to your new home!

The lender will underwrite you as if you were a new customer. This means if your income has changed, you have new loans, or missed some payments lately, they might not be able to let you take your mortgage with you.

But if things have been going well for you, like getting a raise or paying off debts, then porting is easy! You'll just follow the normal steps to apply for a mortgage on your new place.

The original mortgage does need to be repaid, so you either need to sell your home or replace the mortgage with another mortgage.

Thinking of keeping your old place? Maybe it holds sentimental value or you think it will keep going up in price. No problem! You can use a special type of mortgage called "Let to Buy" to help buy your new home. Here's how it works: you rent out your current home while using the rental income to get a mortgage on your new place. Don't worry about the technical terms like "Buy to Let" - that's just another way of saying the same thing.

There are certain lenders such as Nationwide who insist that if you are completing this scenario, that you raise the Let to Buy mortgage with their Buy to Let arm, which is called The Mortgage Works. Most other lenders aren’t worried who you raise the mortgage with, but will need to see the mortgage offer as part of the application.

Getting a buy-to-let mortgage used to be a breeze. Back then, lenders didn't have to check as much paperwork because most buy-to-let deals weren't covered by certain regulations. However, things changed when lenders needed to make sure the rent you receive could comfortably cover your mortgage payments, even if interest rates went up. This means most lenders now have a limit of lending up to 75% of the property value.

There are some lenders who can offer deals for more than 75%, but for most, you'll need at least 25% equity in the property. This can be tricky for Let to Buy situations, especially if you already have a mortgage on your own home (meaning the loan-to-value ratio might be higher than 75%). If this is the case, you might need to repay some of the mortgage, or you might even need to sell your current home to free up some cash.

The exact amount you can borrow can vary depending on the lender, so it's always best to chat with us to see what options might work for you and your situation.

The Mortgage Works, who are part of Nationwide, can lend up to £156,576 on a Let to Buy application for High Rate Tax payers with a rent of £1,000 per month. If you are not a High Rate Tax payer, this increases to £200,417 with a rent of £1,000 per month.

Owning a home with a manageable mortgage is great! But what if you're thinking about buying another property? Here's something to consider: using your existing home to get a bigger deposit for the new one.

This might seem counterintuitive, but hear me out. Most people prioritise paying off their main home first. So, if things got tough down the line, you could sell the rental property instead of your own home. It's a worst-case scenario, of course (especially after a rough couple of years!), but planning for the unexpected can bring peace of mind.

This was the scenario for my clients, a big, happy family with a steady income. Stuck with a fixed-rate mortgage from their old lender, they couldn't borrow enough to buy their dream home because of the number of kids they had. Luckily, the penalty to switch lenders wasn't too bad, and they were willing to pay it to make their dream a reality.

The good news? Other lenders didn't penalise them for their family size and could offer them a much bigger loan. The rates were a bit higher than their current fixed rate, but again, they were happy to pay a little extra to get their forever home.

What happens next is that when they buy their new home, they will repay their existing lender and their early repayment charge using their savings, the money raised from their Let to Buy and the new mortgage on their new home.

Owning a home you can rent out? Here's an option you might not have considered! If you've already saved a deposit for your new home, you can skip moving your mortgage or using a Buy-to-Let product. Many lenders offer "Consent to Let." It's a simple process where you ask your lender's permission to rent out your current place while keeping your regular mortgage. There might be a fee or a slightly higher interest rate, but we can help you navigate that. Here's the catch: you can typically rent out until your fixed-rate period ends. When it's time to remortgage, you'll likely need to switch to a Buy-to-Let product.

This is a great option if you need to move for work, travel, or the Armed Forces (they often have even more flexibility!). So, if you're thinking about moving but want to hold onto your current property, Consent to Let might be the perfect solution!