How soon can you switch your mortgage

diggerdigger

Hi, i have drawn a mortgage in Jan 2018. We were going to live in the property for a couple of years, then do a big renovation. But alas its wrecking our heads, as its really rough and needs total work. The bank wont entertain us changing mortgage with them until at least 12 months in. I dont really want to wait anymore. So the question is, is there any reason why I cant switch bank for mortgage after 4 months, move out and get the work done now. I have borrowing capacity for the new funds at most banks.

And before everyone points out how short-sighted we were, - we did do this type of thing before so we thought we were going to be ok with it, it didn't seem so bad then, its different now were are older, busier, and have kids, and less energy and tolerance for lack of creature comforts.

cruizer101

I don't think there is any restriction on switching, although if you are in a fixed mortgage there will be break penalty which you have to factor in to your calculations.

When you say you have borrowing capacity at most banks do you mean they would give you more money on the current property or just in general you would be approved for a higher amount.

Will you be looking to borrow more than the house is worth to do the work on it.

diggerdigger

cruizer101 wrote: »

I don't think there is any restriction on switching, although if you are in a fixed mortgage there will be break penalty which you have to factor in to your calculations.

When you say you have borrowing capacity at most banks do you mean they would give you more money on the current property or just in general you would be approved for a higher amount.

Will you be looking to borrow more than the house is worth to do the work on it.

Not fixed rate, so no issue there.

From a borrowing capacity, I am not near the salary multiples applied by the banks, so I would generally be approved for the total higher amount.

From an end state, the value after the work is done is higher than the costs to do the work plus original purchase - maintaining a LTV lower than 80%.

Rew

You can switch as soon as you can get another bank to accept you. Some banks have switching policies so you will need to ask the target bank what theirs is.