How do I port a mortgage?
Q: We are selling and hope to "port" the mortgage and carry it over to our new home. Since I renewed my existing mortgage, I have taken voluntary severance and am now working part-time and searching for a full-time job. My wife also has some money coming in. How can we do this?
Most mortgage deals will be portable, which means that they can be taken to another property when you move without changing the terms of the deal. This can be desirable for those with a very attractive rate that they want to keep but is particularly useful where a borrower is tied into a current deal with an early repayment charge.
Early repayment charges can easily amount to thousands of pounds. Instead of incurring the ERC, it may be possible to port the mortgage to the new property and if any additional borrowing is required, take a top up on a current rate.
However, lenders will reassess the borrowers to ensure that they can afford the mortgage, even if there is no increase to the borrowing requirement. In this case it will therefore depend on whether there is still adequate total household income to meet the lender’s affordability criteria. If not, then you may find that your lender is not willing to agree to port the mortgage, even though you continue to meet your monthly payments.
Lenders have always taken this approach but with criteria undergoing such a tightening in recent years, more borrowers are finding that they can run into difficulties in meeting lender requirements when attempting to port a mortgage.
Answered by David Hollingworth, London & Country
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