Upsizing to a bigger home
Your equity becomes the next deposit, the borrowing goes up, and the affordability test runs again from scratch. We make the step up work on paper before you fall for a house.
Upsizing is the classic second step: more bedrooms, more garden, more mortgage. The deposit on the next home is usually your equity in this one plus any savings, and the new borrowing is tested against your income and commitments as they stand today, not as they stood when you first bought. The gap between what you assume you can borrow and what a lender will actually offer is where upsizing plans wobble. We close that gap before you start viewing.
Who this is for
- Your household has outgrown the current home and the next one costs materially more.
- You want to know what your equity plus savings actually buys at current lending multiples.
- You are mid-fix and need to understand porting with a top-up before you commit.
- Your income or outgoings have changed since the last mortgage and you want a realistic number.
Upsizing turns on three numbers: the equity you release from the sale, the borrowing a lender will offer today, and the full cost of the move. Get all three early and the rest is house-hunting.
Your equity is the next deposit
Equity is sale price minus mortgage balance minus selling costs. A home worth £350,000 with a £210,000 mortgage holds £140,000 of equity; after agent and legal fees roughly £133,000 reaches the next purchase. Put that against a £500,000 target and you are borrowing around £367,000 at roughly 73% loan-to-value (LTV, the percentage of the property price you are borrowing), which sits in a competitive part of the market for rates.
The affordability test runs again
Lenders do not carry your old approval forward. The new, larger loan is tested against current income, current commitments and current rates. Childcare costs, car finance and loans that did not exist at the first purchase all count now. Most lenders work to around 4 to 4.5 times income with stretch options for stronger profiles, but the monthly stress test is what actually gates bigger borrowing. We run it before you view, not after you offer.
Porting with a top-up
If you are mid-fix, the usual structure is to port the existing balance on its current rate and take the extra borrowing as a new product with the same lender. That avoids the early repayment charge (ERC, the penalty for breaking a deal early) but splits the mortgage into two parts. We compare that against breaking the deal and starting fresh with a new lender, with the ERC priced in. Sometimes the clean break wins.
Stamp Duty at home-mover rates
There is no first-time buyer relief the second time around. On a £500,000 onward purchase at current standard rates, the Stamp Duty Land Tax (SDLT) bill is £15,000, payable on completion in cash. It cannot normally be added to the mortgage, so it comes out of the same pot as the deposit. We put it in the budget on day one.
Term and monthly cost
A bigger loan does not have to mean an unmanageable monthly payment. Extending the term lowers the monthly cost but raises the total interest paid over the life of the loan. We model two or three term options so you choose the trade-off knowingly.
Common pitfalls we see
Budgeting to the maximum loan with nothing left for the higher running costs of a bigger house. Forgetting SDLT, moving costs and immediate works, which together commonly run to five figures. Assuming the lender will offer the same multiple as last time despite new commitments. All three are fixable when caught early.
How Major Money Matters helps
Specific things we do for this case type. No generic platitudes.
Give you a real budget before you view
Equity, borrowing and full move costs on one page. You go house-hunting with a number that will survive underwriting.
Compare port-and-top-up with a clean switch
Mid-fix movers usually have two viable routes. We price both, ERC included, and recommend on the total cost over the deal period.
Stress-test the new monthly payment
We show the payment at two or three term lengths and at the lender stress rate, so the bigger house does not become a monthly squeeze.
Place changed circumstances with the right lender
New job, new baby, new self-employment. Criteria vary widely and we match the current shape of your income to the lender that fits, across over 65 lenders.
Frequently asked questions
How much can I borrow for my next home?
Most lenders work to around 4 to 4.5 times income, with stretch options for stronger profiles, all subject to a monthly affordability test on current commitments. The realistic number comes from running your actual figures, which takes one short call.
Can I use my equity as the whole deposit?
Yes, that is the standard upsizing structure. Remember that selling costs, SDLT and moving costs come out of the same pot, so the deposit that reaches the new purchase is smaller than the headline equity figure.
Do I pay Stamp Duty when I move up?
Yes, at standard home-mover rates on the new purchase, with no first-time buyer relief. On a £500,000 purchase that is £15,000 at current standard rates, payable in cash on completion.
I am mid-fix. Should I port or break the deal?
It depends on your existing rate, the size of the early repayment charge and what the market offers today. We run both routes side by side on total cost. There is no general answer, only your answer.
My outgoings have grown since the last mortgage. Will that reduce what I can borrow?
Usually yes, because lenders test current commitments. The effect varies a lot by lender, so a case declined or shaved at one lender can be placeable in full at another. That matching is exactly the job of a mortgage broker.
Related
Closest siblings to this scenario. Worth a read.
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Outgrown the house? Get the real number
A quick 15-minute call turns your equity and income into a realistic buying budget, with SDLT and move costs included. Then you can house-hunt with confidence.
Named adviser, wherever possible. No call centre. We aim to return your call as quickly as we can. Mon to Fri 9am to 5pm, weekend appointments on request.