Carrying a mortgage onto the next property

feelo

Hi,

I'm thinking of buying at some stage (will prob hang on now for a while and wait for the inevitable post MIR fall). Could people clear up a couple of things in relation to mortgages. If say I buy in the next year and I wish to sell and buy again in say seven years time, can I carry the mortgage onto the next property? The reason I ask this is because don't you spend the first number of years paying back interest only on a mortgage so if you sell in a couple of years and pay the mortgage up won't you have just being paying off interest? which means when you get another mortgage, which will probably happen at some point, won't you simply be starting from scratch again? Maybe I'm missing something here but it all makes buying a home, unless you actually see the mortgage term out, seem like a waste of time! and money!

dearg lady

feelo wrote: »

Hi,

I'm thinking of buying at some stage (will prob hang on now for a while and wait for the inevitable post MIR fall). Could people clear up a couple of things in relation to mortgages. If say I buy in the next year and I wish to sell and buy again in say seven years time, can I carry the mortgage onto the next property? The reason I ask this is because don't you spend the first number of years paying back interest only on a mortgage so if you sell in a couple of years and pay the mortgage up won't you have just being paying off interest? which means when you get another mortgage, which will probably happen at some point, won't you simply be starting from scratch again? Maybe I'm missing something here but it all makes buying a home, unless you actually see the mortgage term out, seem like a waste of time! and money!

every payment is part interest/part capital repayment. At the start the interest portion is higher.
If you sold and purchased a new home, you would clear your current mortgage, and take out a new one on the new home.

Senna

As said above, mortgage is held against property not person, so a new mortgage is required for new purchase. If you take out a 25 year mortgage and pay it for 7 years, then sell the house to buy another. You should be aiming for your next mortgage to be 18 years long, i.e. you finish paying mortgage at the same time the old mortgage would have been paid off, or hopefully before that.

Use this link to work out how much of your repayments are made up of interest and capital Karls Mortgage calculator, notice the length of the mortgage dictates how much of your repayment is interest and how much is capital.

If you are purchasing a home, try and buy one you will be happy to live in for the full term of the mortgage, too many people bought "starter homes", apartments etc with the plan to sell after a few years. Its hasn't worked out for a huge amount of them and there is no guarantee that someone buying in 2013 wouldn't be in the same boat come 2020.

feelo

Thanks dearg lady and Senna.

Senna I think you are right. I think I will hold out and try and buy something I am happy to live in long term. I don't want to end up paying out a whole pile of extra interest because I have to upgrade. It's a pity you can't bring mortgages forward as then you wouldn't be starting out on paying the interest again.