When you sell your existing house the mortgage will have to be paid off with the proceeds of the sale.
Then your new mortgage and the remainder of the sale proceeds pays for the new house.

I doubt whether you will get the existing rate for the 103 transferred onto the new larger mortgage.

The whole of the new mortgage will be at the higher rate, plus as you know you will have to pay a penalty for ending early and the same will happen if you move early next time.

You need to look everywhere to find the best rate, you don't have to stay with your existing lender.