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Right now is not the time to move, as we've just had a kid and my wife is off work, I'm working on the assumption that she'll go back to work within a year which is not unlikely, but you're right, porting the current mortgage with additional borrowing could be a good option.
My original point was based around this idea: https://www.unbiased.co.uk/life/homes-property/what-s-the-difference-between-a-mortgage-deposit-and-an-exchange-deposit
If we sell up and for 300k, for example, our buyer will provide 30k deposit on exchange, if we're buying somewhere new for 500k I still need to find 20k surplus for the 10% on exchange of our new place. Unless I'm misunderstand something (entirely possible, likely even).
The renting idea was in order to actually have the proceeds of our sale in the bank, but it would be expensive, as you say. Of course we would still end up owing the bank the same or more, but we'd have the surplus for exchange deposit in the bank.
Edit: did the maths and if I were to put away the difference between current mortgage and prospective (60%) mortgage I could raise the funds in a couple of years, but that will never happen as we're down to a single income for now and got some additional outgoings in the near future.
Polygon-
If we sell up and for 300k, for example, our buyer will provide 30k deposit on exchange, if we're buying somewhere new for 500k I still need to find 20k surplus for the 10% on exchange of our new place. Unless I'm misunderstand something (entirely possible, likely even).
Don’t think you’re misunderstanding anything. But 10% also isn’t set in stone. When I sold mine the buyer asked, on the day of exchange, if they could provide a 5% deposit instead. Made no odds to me so I said fine, and everything carried on smoothly.
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It is normally 10% exchange deposit, but most of the time, if you have a property to sell and you have equity in it, no ‘real’ money needs to be sent over.
For example, if a pensioner was downsizing and selling their mortgage free home for 400k, and buying a new one for 300k, they wouldn’t be expected to have to find 30k in cash in addition to pay on exchange.
That would mean that the solicitor would have to send to the customer the 100k proceeds from the sale, and then send back the 30k deposit. (Because once the sale completes, they would have a pot of £430k to send across £300k)
Realistically, a chain of properties couldn’t easily be built if people had to have 10% savings on top of their own property. I don’t think the majority of homeowners in the UK would find that very easy?
So I wouldn’t worry about the exchange deposit at all. First time buyers buy with 5%, people move with no personal savings, just equity, proceeds from the sale of a BTL, without having to find extra free funds.
Renting to no be in a chain is a valid option, though moving multiple times with young children can be stressful in itself.
duncs
Acliff
Not quite sure I follow?
A) would this be to save reduce your outgoings so you can save more?
Typically the interest payments are pretty low, and far less than the rent you would pay. If your mortgage payments are high, you are paying capital off the mortgage, which otherwise you would using to save/pay rent?
B) bridging loan is probably not the term you’re looking for.
At the time of moving, you workout how much mortgage you need with the equity you will get from sale and your savings and go with that. I think particularly for your forever home, there is no real need to worry about getting to a certain deposit level, as currently house prices are increasing faster than most people can save.
Also as you can port the mortgage you don’t necessarily have to wait for 2.5 years before you start thinking about moving.
It’s important to try and keep costs low, but for example is a £2k early exit penalty all that important when you’re offering 20k over asking price to try and secure the property?