Life changes may mean that your current home no longer suits your needs. You may be considering trading up for more space or to move to a new area, or downsizing now that your family has flown the nest.

Organising the finance when you are selling up and moving home can be a bit trickier than for a first home but getting the right mortgage advice can really make the process a lot easier.

With MortgageOne’s smart technology and expert mortgage advice, getting mortgage approval for your home mover mortgage has never been easier, you can even apply for your mortgage online. We are part of the FinanceOne family, which has a strong history of trustworthy and reliable financial services advice for our clients.

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Types of mortgage for selling and moving home

Mortgage porting means that you, in effect, ‘top up’ your existing mortgage with your current lender and use this finance to purchase your new property.

Alternatively, if you cannot transfer your mortgage to a new property or you get a better mortgage deal with a new lender, you can get a new mortgage to finance your home move.

If you taking out a mortgage to move home, you will need to choose between the options available:

A fixed rate mortgage means that the mortgage interest rate you pay is fixed for a certain period of time. This can be for a shorter period of time like a couple of years, or it can be for a longer period.

A fixed rate mortgage means that your monthly repayments will be predictable which can help with budgeting and financial planning. However, there may be penalties or an early redemption charge if you repay your fixed rate loan early.

A variable rate mortgage, sometimes referred to as standard variable rate, is a mortgage where the interest rate can be changed by the lender.

When interest rates are low, a variable rate mortgage can mean lower repayments every month, but these repayments can change and interest rate changes can make a substantial difference to your monthly repayments. 

Variable rate mortgages may allow for more flexibility of you wish to pay off your mortgage early or overpay your mortgage.

A green mortgage is usually a discounted fixed rate mortgage, specifically for purchasing houses that are more energy efficient, based on their BER.

If your house qualifies for a green mortgage, this can mean a lower interest rate. There are Eco mortgages available that lower your repayments if you upgrade the energy rating on your home.

A cashback mortgage typically offers a percentage of the home’s purchase price as a cash sum when you draw down the mortgage.

This can be very useful for professional fees, such as legal fees, or for expenses when you purchase your home but can be expensive in the longer term.

How much can I borrow?

As a second or subsequent home purchaser, Central Bank lending rules allow you to borrow up to 3.5 times your gross annual income as a maximum loan, or your combined annual gross salaries for a joint mortgage. This is known as the loan to income limit (LTI).

You will also need to have a deposit of at least 10% of your new homes value, again according to Central bank rules and the lending criteria of the different mortgage lenders. If you have built up equity in your existing home, you may find that your loan to value (LTV) is actually lower than 90% which may mean that you get a lower interest rate when borrowing.

Use the MortgageOne mortgage calculator to see how much you could borrow based on your income, the equity in your home, and your savings.

Lenders will also look at your regular outgoings and financial commitments, as well as your credit rating, to assess your mortgage application for affordability to ensure that you will meet the monthly repayments. 

Lenders will also need to ensure that you have sufficient savings for the expenses of buying a home, such as professional fees, stamp duty, and contingency etc.

How does the home mover mortgage process work?

There are a series of stage to the process. These are broadly similar to getting your first mortgage with some differences as you will likely be selling your existing house as you purchase your new home.

Calculate how much you can afford based on the estimated sale price of your current home and the value of any equity you have in your home, as well as your savings and gross annual income. It is a good idea to have a professional valuation carried out on your existing home.

You will also need to consider whether you will port or ‘top up’ your existing mortgage, or switch lender. It is always a good idea to consider offers from more than one lender, especially if you have had your mortgage for a number of years as mortgage products available also vary over time and your circumstances may be quite different to when you purchased your first home.

You will also need to choose the type of home mover mortgage you wish to choose between fixed or variable rate, or a green mortgage if your home is eligible.

Your lender may require further documentation from you such as a valuation of your current home, details about your current mortgage, and documentation about your income in order to complete your application.

Following a successful mortgage application, your lender will give you ‘Approval in Principle’, which may be valid for 6 to 12 months, or you will need to reconsider your options if your mortgage application is not approved. You may need to boost your savings, or apply for a lower amount then reapply for mortgage approval.

Here comes the fun part! When you have a provisional mortgage approval or ‘Approval in Principle’, you will know your budget and you can start the search for your new home. 

Once you go ‘Sale Agreed’, you will need to provide your lender with information on the property and any documentation they request for your new home mover mortgage.

You will need to provide your new lender with a valuation for the property that you are purchasing, and details of your mortgage protection and home insurance. 

It is also recommended, and may be a requirement of your lender, that you get a surveyor’s report on your new home.

Moving home is an ideal time to review your mortgage protection or life insurance cover as your lender will legally require you to have mortgage protection in place for the new mortgage amount before you draw it down in most cases.

You will also need to update your home insurance as your lender will require you to have buildings cover for the full rebuild cost of your new home in place before you can draw down the new mortgage.

MortgageOne can advise you and find great offers on mortgage protection and home insurance, so that you will have peace of mind that you are protected as you move home.

When you have gone ‘Sale Agreed’ you will need to engage a solicitor.

Once you have completed the application process, your lender will issue a ‘Letter of Offer’ with the full details of your mortgage to your solicitor who will complete the legal aspects of your house purchase.

Once you have exchanged contracts and paid a deposit, the solicitor will complete the legal process and, finally, draw down the mortgage funds and will complete the purchase of your new home.

If your new house purchase is conditional on you having sold your previous home prior to purchasing the new one, your solicitor will make this a condition of the sale. 

Your solicitor will usually handle the sale of your old home and the purchase of the new home and will also deal with redeeming your old mortgage and drawing down the new mortgage if you are switching.

Can I move if I am in negative equity?

Negative equity occurs where the value of your home is less than the remaining outstanding mortgage balance.

It is possible to get negative equity home mover mortgages whereby you bring the negative equity portion of your current mortgage across to a new mortgage.

You may have to have a deposit of at least 10% of the purchase price of your new home, although if you are trading down you may not need a deposit. There are also limits to the maximum loan to value allowable which may restrict how much you can borrow.

Can I move and keep my tracker mortgage?

You may need or wish to move home but be concerned about keeping your tracker mortgage. A tracker mortgage has an interest rate that is linked to the European Central Bank Rate and can offer very low interest rates.

It is no longer possible to obtain a new tracker mortgage, but there are home mover tracker mortgages for those already on one. 

A home mover tracker mortgage will typically allow you to keep the remaining balance on your current mortgage as a ‘tracker portion’ of your new mortgage which will continue to have a tracker rate until the end of the term of the original tracker mortgage. The remainder of the mortgage balance will have a different interest rate, usually a standard variable rate.

MortgageOne for your home mover mortgage

MortgageOne has Central Bank regulated mortgage advisors who can give you trusted and reliable advice on organising the finance for your new home. 

Fill in our mortgage calculator to see how much you could borrow, depending on your income and deposit. You can also compare great deals from all of the leading mortgage lenders on the Irish market.

You can apply for your mortgage online, or you can talk to one of our mortgage advisors to discuss your needs and circumstances and we can help you to compare mortgage options.