A Change of Circumstance

A Change of Circumstance

Can I move home and take my current mortgage with me?

If you need to move whilst either you have a deal thats too good to lose or you’re tied into a mortgage and want to avoid the early repayment charges you may be able to do what’s called porting. This is where you move your mortgage to another property, you may be able to top up with additional funds if needed. Be warned though, not all lenders or products are portable so it’s best to consider this when you’re choosing a deal. Sometimes the portability may be withdrawn if the lender goes into administration or the debt is sold known as securitization. If the debt is sold it will still be protected by UK regulation, but you may lose some of the benefits of having a typical lender as your mortgage provider. A person cannot stop securitization, that being said it is pretty uncommon.

Can I pay more off my mortgage?

Most mortgages have an overpayment facility of around 10% per year. This will allow a person to reduce the balance of the mortgage either with ad hoc payments, monthly contributions or lump sum payments. After the allowance has been used up the lender will typically apply an early repayment charge based on the amount repaid, typically on a percentage basis for example a 3% early repayment charge with an overpayment of £10,000 would incur a charge of £300. The early repayment charges generally just applies whilst there is a product on the mortgage, there can be an overhang and they can differ so it’s always best to check first. Once the product expires the mortgage will generally revert to a standard variable rate where there are no restrictions or limitations to the repayments made. This is generally when a remortgage or follow-on deal would be arranged to complete/take effect.

Can I add or remove someone from a mortgage?

It is possible to add and remove a person from a mortgage, generally this also means they have to be added to the land registry too. If this happens additional stamp duty land tax may be payable which can be costly. To add someone to a mortgage a solicitor or conveyancer will be required to complete what is called a ‘transfer of equity’. It is possible to add someone to the mortgage but not the deeds, this is known as joint borrower sole proprietor. Not all lenders allow this, but those that do can sometimes allow up to 4 people on the mortgage to help with affordability. With most lenders, especially the high street lenders, 2 people per application is often the maximum, those that do allow more don’t always take all the incomes, which can make the exercise somewhat pointless, but they still allow it.

Can I rent the house I live in?

If you find yourself in a change of circumstance and want to move out of the mortgaged property and rent it out you can apply for Consent to let. This is where you formally ask the lender for permission to rent out the property. Each lender has their own approach to this, some may agree it permanently. Some on a temporary basis, some may charge a fee or additional interest too. They also don’t have to agree it, which can be problematic. Consent to let is generally seen as a more temporary option so you can move back in at a later date. You could also consider a remortgage onto a buy to let property, this may allow other options but will often require a minimum equity/deposit of 25% of the house value at that point, deals with less equity/deposit do exist but the rates won’t be as competitive and less lenders offer these. The lender will not allow you to move back into the property whilst a buy to let mortgage is on the property.

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Financial Options (Selby) Ltd
24, Finkle Street, Selby, North Yorkshire, YO8 4DS


Call: 01757 709888