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    Reasons for downsizing

    There are many reasons why you may be considering moving to a smaller home. Perhaps you have recently gone through a lifestyle change and your needs and priorities have changed.

    The reasons for downsizing your house may include:

    • Moving closer to family and friends
    • Desiring a simpler lifestyle
    • Empty nesting
    • Lower bills and other costs
    • Retirement planning
    • Equity release

    Your home may be repossessed if you do not keep up repayments on your mortgage.

    Downsizing Mortgage

    Bridging loans for downsizing property

    If you have found a property you would like to buy now, however it is not the right time to sell your current property, a bridging loan could be a suitable option for you.

    A bridging loan for downsizing property can allow you to secure your new home while providing flexibility to sell your current property at a time that suits you. This type of loan can give you peace of mind, removing the pressure to rush the sale and allowing you to wait for the right offer of your current home.

    Bridging loans typically offer up to 12 months for selling your current home and repaying the loan in full. While there are various costs, if the loan aligns with your needs, these expenses can be offset by selling your property in a potentially more favourable market.

    Often, many of the associated costs can be added to the loan amount to reduce the upfront costs of bridging finance. Interest rates will vary by lender and can change daily. This rate is also dependent on your circumstances. Our consultants monitor these rates closely and can talk you through all the costs involved so you can make an informed decision.

    Downsizing retirement

    Downsize your home for retirement

    You may be looking to downsize your current home if you have retired recently or plan to retire in the near future. If you find yourself in a larger house than you need or desire to be closer to local amenities, family, and friends, downsizing can be a practical solution.

    However, it’s essential to approach this decision carefully. Consideration should be given to the costs involved, including any potential tax implications. Additionally, it’s important to realistically assess the financial benefits of moving into a smaller home and what you can expect to achieve from the sale of your current property. Our expert team is here to guide you through the process, helping you understand your options and determine the right course of action.

    What are the costs of downsizing my home?

    It is important to factor in the costs when downsizing your home. By carefully considering these costs, moving into a more manageable space can be highly effective for your future finances.

    • Legal fees: Costs associated with hiring a solicitor or conveyancer to handle the legal aspects of selling your current property and purchasing a new one.
    • Estate agent fees: Fees paid to estate agents for their services in marketing and selling your current property.
    • Survey costs: Expenses related to property surveys, including valuation surveys and structural surveys, may be required by lenders or for your peace of mind.
    • Removal costs: Charges for professional moving services to transport your belongings from your current home to the new property.
    • Stamp Duty Land Tax (SDLT): Tax payable on property purchases above a certain threshold, which varies depending on the value of the property and your circumstances.
    • Interest costs: The interest rates vary by lender and can change daily. This rate is also dependent on your circumstances.
    • Other costs: Miscellaneous expenses such as storage fees, utility connection/disconnection fees, and any repairs or renovations needed before selling or moving into the new property.
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    Downsizing House FAQs

    • Can I get a bridging loan if I am retired?

      Yes, it is possible to get a bridging loan when you are retired. Lenders can take a holistic approach to assessing affordability, considering various sources of income including pensions.

    • Is it worth downsizing to be mortgage free?

      Deciding to downsize to become mortgage-free can offer significant financial advantages for many individuals. However, it is important to approach this decision with careful consideration and realistic planning. Take into account factors such as the actual market value of your current home, the associated costs of moving, and potential lifestyle adjustments that come with downsizing. By thoroughly evaluating these aspects, you can make an informed decision that aligns with your financial goals and overall well-being.

    • Can I buy now and sell my current property later?

      Yes, it is possible to buy a property now and sell your current property later, especially if you’ve found your dream home on the market but timing isn’t ideal for selling your current property. In such cases, a bridging loan can be a viable solution. This type of loan provides short-term funds secured against your current property, allowing you to purchase the new property. Typically, bridging loans offer up to 12 months for you to sell your current property and receive the right offer, providing flexibility and peace of mind during the transition period.

    • What are the tax considerations for downsizing my home?

      There are tax considerations to consider when downsizing a property, such as inheritance tax and the Residence Nil Rate Band (RNRB). Private Finance is not a tax advisor however we can introduce you to a specialist in this area if you would like. Please be aware that this page does not constitute tax advice.

    Private Finance