New Mortgages for Home Movers

We'll explore when a new mortgage for home movers makes sense, how the application process works when you have existing equity, and key costs to consider. Discover how IMC Mortgage Brokers can help you compare and secure the perfect new mortgage to make your move smooth and financially smart.

When a new mortgage is your best bet

Deciding between porting your current mortgage and taking out a new one is a significant choice. Here are key situations where a new mortgage for home movers often comes out on top:

• Your current mortgage isn't portable: Some mortgage products simply aren't designed to be ported. If your existing lender doesn't offer this flexibility, a new mortgage with a different provider becomes your only route.
• Better rates are waiting elsewhere: The mortgage market is constantly evolving. Your existing lender might not be offering the most competitive rates available today, or another lender might have a deal perfectly tailored to your new loan-to-value (LTV) position with the equity from your sale. Don't settle if there's a more favourable deal to be found!
• Significantly different borrowing needs: If you're drastically upsizing and need to borrow more, or significantly downsizing and borrowing less, a new mortgage for home movers can offer a cleaner, more streamlined solution than a complex partial port with additional borrowing.
• Current mortgage deal is ending soon (or ended): If your fixed-rate or tracker deal is about to expire, or you're already on your lender's Standard Variable Rate (SVR), there might be little benefit to porting. It's an ideal time to explore the entire market for a fresh, competitive deal.
• Your financial circumstances have changed: If your income, employment status, or credit score has changed significantly since your last mortgage application, a new lender might be more accommodating or offer better terms that align with your updated profile.
• Unfavourable Early Repayment Charges (ERCs): Sometimes, the ERC on your existing mortgage might be minimal, or it might be outweighed by the long-term savings of a significantly better new mortgage deal elsewhere.

How a new mortgage for home movers differs

You might be wondering, how does getting a new mortgage for home movers differ from just remortgaging or a first-time buyer mortgage?

• It's a purchase, not just a re-finance: Unlike a standard remortgage where you simply switch lenders or deals on the same property, a new mortgage for a home move is directly tied to the purchase of a new property. This means additional legal work for the sale and purchase, not just the mortgage transfer.
• Leveraging your equity: While a first-time buyer relies on fresh savings for a deposit, you, as a home mover, often use the equity from the sale of your current property as your deposit for the new home. This could unlock better LTV tiers and more competitive rates.
• The property chain: A remortgage doesn't involve coordinating a property chain. When you're buying a new home with a new mortgage, you're intrinsically linked to your current property's sale and potentially other sales in a chain, which requires careful coordination.
• Additional costs: Beyond mortgage-related fees, a home move comes with costs like estate agent fees (for your sale), removal costs, and potentially more extensive survey fees for the new property, which aren't typically associated with a simple remortgage.

The process for a new mortgage for home movers

The application process for a new mortgage for home movers benefits from your homeowner status and is part of the larger home moving journey.

While the fundamental steps are similar to any mortgage application, your IMC Mortgage Broker will guide you through how your existing equity and property sale fits into the process. We'll help you prepare the necessary documents (such as your current mortgage statements and details of your sale proceeds) and navigate lender assessments.

For a full breakdown of every stage of securing a mortgage for your home move, please refer to our comprehensive guide on the Home Moving Mortgage Process Explained.

Unpacking affordability and LTV

When applying for a new mortgage for home movers, lenders will assess your affordability and the LTV ratio on your new property with keen interest:

• Affordability checks: Lenders will perform rigorous checks to ensure you can comfortably afford the new mortgage payments, even if interest rates were to rise. They'll scrutinise your income (including any changes since your last mortgage), existing debts, and regular household expenditures. Your experience managing a previous mortgage is a positive indicator.
• LTV considerations: This is where your equity truly shines! LTV is the ratio of your mortgage loan amount to the property's value. For example, a £200,000 mortgage on a £250,000 home is an 80% LTV.
  • Lower LTV = better rates: Because you're using equity from your current home as your deposit, you could secure a lower LTV on your new mortgage. Lower LTVs generally present less risk to lenders, which could unlock access to more competitive interest rates and product options.
  • Your IMC Mortgage Broker will work with you to understand how your expected equity can best be leveraged to achieve the most favourable LTV for your new mortgage for home movers.

Potential costs when taking out a new mortgage

While a new mortgage for home movers could offer significant long-term savings, it's important to be aware of the specific costs associated with it:

• Early Repayment Charge (ERC) on your old mortgage: If you're breaking an existing fixed or tracker deal early to take out a new mortgage with a different lender, you will likely incur an ERC. Your broker will calculate this to ensure the new deal's benefits outweigh this cost.
• New mortgage arrangement/product fees: Many new mortgage products come with an upfront fee (sometimes called an arrangement fee or product fee), which could often be added to the mortgage loan, although this means you'll pay interest on it.
• New lender valuation fees: The new lender will require a valuation of the property you're buying. Some lenders offer free valuations, while others charge a fee.

For a complete breakdown of all potential expenses associated with moving home, including legal fees, estate agent fees, Stamp Duty, and removal costs, please see our dedicated guide: Home Mover Costs & Fees Explained.

Navigating mortgage types for your new home

Just like any mortgage, a new mortgage for home movers can come in various types, each with its own features. Your IMC Mortgage Broker will discuss these in detail to find the best fit for your financial goals:

• Fixed-rate mortgages: Your interest rate and monthly payments remain the same for a set period (e.g., 2, 3, 5, 10 years). This provides payment certainty, which could be ideal for budgeting your new home.
• Tracker mortgages: Your interest rate "tracks" an external rate (usually the Bank of England Base Rate) at a set percentage above it. Payments could go up or down, offering flexibility but less certainty.
• Standard Variable Rate (SVR): This is the default rate a lender moves you onto after your initial deal ends. It's set by the lender and can change at any time. It's typically higher than fixed or tracker rates.
• Offset mortgages: This type links your savings account to your mortgage, potentially reducing the amount of interest you pay.

How IMC Mortgage Brokers helps

Choosing a new mortgage for home movers involves sifting through hundreds of products from various lenders. This is where IMC Mortgage Brokers truly shines:

• • Whole-of-market access: We have access to a vast array of mortgage products from a wide range of lenders, including exclusive deals not directly available to the public.
  • Personalised advice: We'll take the time to understand your unique financial situation, your future plans, and your priorities for your new home.
  • Expert comparison: We'll conduct a thorough comparison of all suitable new mortgage products, factoring in interest rates, fees, repayment charges (on your old mortgage), and any specific criteria, presenting you with the most cost-effective and appropriate options.
  • Streamlined application: We'll manage the entire application process on your behalf, ensuring all paperwork is submitted accurately and efficiently, saving you time and stress.

• Coordination: We'll liaise directly with lenders, estate agents, and solicitors, helping to keep your home move on track.

Thinking about a fresh start with a new mortgage for your next home? Contact IMC Mortgage Brokers today for a free, no-obligation consultation. We're here to help you unlock the perfect deal and make your move as smooth as possible.