Residential mortgages:
Moving home
Moving home brings your existing property, current mortgage and next purchase into the same conversation. You may be looking for more space, relocating for work or choosing somewhere that better suits your family.
The mortgage arrangements depend partly on what happens to your current home. Selling it may release the deposit for your next purchase. Keeping it could involve managing two mortgages, arranging short-term funding or becoming a landlord.
Understanding the options early helps establish a realistic budget and identify how the sale, purchase and borrowing need to fit together.
Upsizing
Moving to a more expensive property usually involves combining equity from your existing home with additional borrowing and, sometimes, savings.
Your equity is the difference between the property’s value and the borrowing secured against it. However, the amount available for your next purchase will also depend on selling costs, any mortgage repayment charges and the money you need for moving.
For example, selling a home for £400,000 with a £250,000 mortgage leaves £150,000 before costs. If £20,000 is needed for selling, buying and moving expenses, the remaining £130,000 could provide the deposit towards your next home.
Establishing your borrowing capacity
A larger deposit does not automatically mean you can obtain a larger mortgage. The lender must also be satisfied that the borrowing is affordable.
Your income, financial commitments, dependants and intended mortgage term may have changed since your last application. A higher salary could improve borrowing capacity, while childcare costs, additional credit commitments or a shorter term may reduce it.
The assessment also depends on the lender. Differences in the treatment of bonuses, self-employed profits or other income can materially affect the amount available.
It is worth establishing both your likely borrowing capacity and a comfortable monthly payment before committing to a purchase price.
Allowing for the cost of the move
Alongside your deposit, you'll need to budget for estate agency fees, legal work on the sale and purchase, surveys, mortgage fees, property-purchase taxes and removals.
A larger home may also bring higher council tax, energy bills, insurance and maintenance costs. These ongoing expenses should form part of the decision about what feels affordable.
Porting your mortgage
Porting allows you to take an existing mortgage product, including its interest rate and remaining deal period, to a new mortgage secured against your next home.
The original mortgage is normally repaid when your current property is sold. The lender then makes a new loan against the property you are buying, applying the existing product to the eligible borrowing.
This can be valuable where you have a competitive rate or would otherwise face an early repayment charge.
However, a portable mortgage does not guarantee that the lender will approve the move. The application remains subject to its porting requirements, assessment of your circumstances and acceptance of the new property.
Porting with additional borrowing
If you need a larger mortgage, the additional amount will normally be taken on a separate product from the lender’s available range.
For example, you might retain your existing rate on £200,000 and borrow a further £100,000 on a new deal. The two parts may have different interest rates and deal end dates.
The comparison should consider the combined cost of both parts against replacing the whole mortgage with another lender, including any early repayment charge.
Borrowing less or completing on different dates
If you need a smaller mortgage, an early repayment charge may apply to the amount that is repaid rather than ported, subject to the lender’s allowances.
Timing also matters. Where the sale and purchase do not complete together, some lenders allow a mortgage to be ported as long as the gap does not exceed a certain window of time. The lender may have specific rules about retaining the product or refunding an early repayment charge. Time limits and conditions vary.
These arrangements should be confirmed before relying on them, particularly if you intend to sell first and move into temporary accommodation.
Buying before selling
Buying your next home before selling the current one can give you more control over the move. It may help secure a particular property, avoid a delayed chain or provide time to complete work before moving in.
The main challenge is funding the purchase while the equity in your existing home remains tied up.
Depending on your circumstances, the options may include savings, borrowing that allows you to hold both properties temporarily, or bridging finance. The lender must understand that your existing home has not yet been sold and how the borrowing will ultimately be reduced or repaid.
Read more about regulated bridging finance.
Holding two properties temporarily
If you have sufficient funds for the deposit and costs, it may be possible to purchase with a new residential mortgage while retaining the existing property pending sale.
Lenders differ in how they assess the existing mortgage and the costs of maintaining two homes. A strong income and substantial equity can help, but neither removes the need for an acceptable affordability assessment.
Your budget should allow for a longer overlap than expected, including mortgage payments, insurance, utilities and other property costs.
Bridging finance
A bridging loan provides short-term funding to cover a gap between buying and selling. It may be secured against your existing property, the new property or both, depending on the arrangement.
The lender needs a credible repayment plan, often called the exit strategy. This may involve selling your current home and using the proceeds to repay the bridge, potentially alongside a longer-term mortgage on the new property.
Bridging finance generally costs more than a conventional residential mortgage. Interest may be added to the loan rather than paid monthly, but it still increases the amount that must be repaid.
The assessment should consider what happens if your home takes longer to sell or achieves a lower price than expected. If refinancing forms part of the repayment plan, its feasibility should be established before the bridging loan is arranged.
Property-purchase taxes
Owning both properties at completion can increase the tax payable on the new purchase.
In England and Northern Ireland, buying a new main home before selling the previous one will generally trigger the higher rates of Stamp Duty Land Tax (SDLT), commonly referred to as "Stamp Duty". A refund of the additional element may be available if the previous main residence is sold within the required period and the relevant conditions are met.
Scotland and Wales have their own rules. Your solicitor should confirm the upfront liability and any potential refund before you commit.
Let-to-buy
Let-to-buy involves keeping your current home to rent out while buying another property to live in.
Typically, the existing home is remortgaged onto a suitable buy-to-let arrangement, potentially releasing equity towards the next purchase. A separate residential mortgage funds the new home.
This can suit someone who wants to retain the original property as a longer-term investment. It should be considered as a decision to become a landlord, including the costs and responsibilities that come with it.
Read more about let-to-buy mortgages.
How the borrowing is assessed
The mortgage on the retained property is usually assessed primarily against its expected rental income and the lender’s rental stress calculation, together with its value and other criteria.
The new residential mortgage is assessed against your personal affordability. Its lender will also consider the retained property and how its mortgage and running costs are covered.
Having substantial equity does not necessarily mean all of it can be released. The amount available may be constrained by the rental assessment as well as the maximum loan-to-value.
The two applications need to be coordinated. Some lenders require the remortgage and onward purchase to complete simultaneously.
Consent to let
In some circumstances, your existing lender may allow you to rent out the property under a consent-to-let arrangement instead of immediately remortgaging.
Permission is not automatic. Conditions, additional charges and restrictions may apply, and consent to let does not itself provide extra funds for the next purchase.
Its suitability depends on the lender’s rules, how long you intend to let the property and whether you need to release equity.
The wider landlord commitment
Rental income needs to cover more than the mortgage. Allow for maintenance, insurance, letting or management fees, applicable compliance costs and periods without a tenant.
Keeping the property can also affect purchase taxes on your new home and the tax treatment of rental income and a future sale. These costs should be understood before deciding whether retaining the property makes financial sense.
Our Specialist buy-to-let knowledge hub explores rental assessments, property types and landlord borrowing in more detail.
Bringing the move together
The right arrangement depends on your priorities, the equity available and how much flexibility you need around timing.
Porting may preserve a valuable mortgage deal. A new lender may offer more suitable borrowing. Buying before selling can provide flexibility where the funding and repayment plan are sound, while let-to-buy may suit a longer-term intention to retain the existing property.
Our role is to assess the sale, purchase and mortgage arrangements together, explain the costs and help you plan a move that works financially as well as practically.
It starts with a conversation.
Frequently asked questions.
Every client and every mortgage is different, but there are some questions we are asked regularly.
From affordability and deposits to complex income, expat mortgages and specialist property finance, our FAQs explain how different lenders may approach different circumstances.
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