Porting a mortgage explained

When you're moving home, you can either take your existing mortgage with you or get a new mortgage. Porting a mortgage - is often the cheaper and easier option. We look at how it works, the pros and cons and whether yours is portable.

Angela Kerr Director, Editor

What does porting a mortgage mean?

Porting a mortgage is when you buy a new home and transfer your existing mortgage to your new property. However, while you’ll keep the same mortgage rate and features, it will technically be a new mortgage so you will have to complete a mortgage application.

But while many mortgages are portable, there are no guarantees your lender will let you do it. Read on to find out more.

How does porting your mortgage work?

When you’re porting a mortgage, it’s the mortgage rate or deal that is portable, not the loan. So if you want to port your mortgage, you’ll need to apply for the mortgage again. This is because you’re asking your lender to re-lend you the money to buy a new home.

Any change to your circumstances may have a bearing on whether or not the lender will let you port your mortgage, including:

• Your finances and household income: When you’re porting a mortgage, your financial situation and household income will be checked. If you’ve had a change in circumstances such as recently becoming self-employed the lender may reject your application.
• Lending criteria: Your lender may refuse to let you port your mortgage if you don’t meet its current requirements.
• Will they lend on the property you want to buy? Some lenders are reluctant to lend on certain types of property. Your lender will also carry out a valuation of the property you want to port your mortgage to. Remember a mortgage valuation survey isn’t the same as a survey of the condition of your new home.

Get fee free expert advice on your mortgage options today:

What happens if I want borrow more money?

If you’re porting a mortgage and want to borrow more money, it can’t simply be added to your existing loan. You’ll have to apply separately for a mortgage deal for the top up amount. This will usually be at a different rate.

Porting a mortgage example if you’re ‘topping up’

Say you’re selling a house for £200,000 and are porting a mortgage of £150,000 to your new house which costs £250,000. Here’s how it would work:

• Current mortgage balance: £150,000
• Current property valuation: £200,000 (this means you’ll have £50,000 equity)
• New home valuation: £250,000
• New mortgage: £200,000 (£150,000 current mortgage balance + £50,000 additional borrowing, using £50,000 equity towards the purchase)

Bear in mind, if you’re porting a mortgage and want to borrow more, you cannot usually top up the mortgage with a loan from another lender. Most lenders will only offer a first charge mortgage meaning that if you default on the mortgage and your home has to be repossessed, it solely belongs to them.

For advice on how to increase your mortgage, speak to our fee free mortgage broker partners at L&C

Can I port my mortgage to a cheaper property?

This will depend on your lender. Even if the property is cheaper, you’ll still need to go through an affordability check and the lender may not let you increase your loan to value ratio.

Also, if you’re downsizing or moving to a cheaper area and need to borrow less for your new home, you may need to pay an early repayment charge on the amount not being ported.

For free mortgage advice see our award winning mortgage broker service

What are the drawbacks of porting a mortgage?

The main drawbacks of porting a mortgage are:

• You’ll need to reapply for your mortgage and you may not qualify.
• If you want to buy a more expensive property, you may find the lender won’t agree to lend you more.
• When porting a mortgage and borrowing more, you’ll be tied to one lender so you won’t be able to shop around to see if you can find a better rate.
• You’ll have two loans and may need to pay another arrangement fee.

I can’t port my mortgage, what can I do?

If you can’t port your mortgage, here are your options:

• Speak to your lender and ask whether they can review their decision: If you think you’ve been treated unfairly by your lender, get in contact with the Financial Conduct Authority and Financial Ombudsman Service.
• Remortgage onto a new deal: However, before doing this it’s vital to find out what charges you may need to pay if you remortgage including any early repayment charges, any exit fees and any costs incurred in arranging your new mortgage such as an arrangement fee and valuation fee. For more information, read our guide on Mortgage fees and costs.
• Stay put: If you can’t port a mortgage and if remortgaging is too expensive you may need to stay in your current home until your current mortgage deal expires.

Read more in our guide Selling a house with a mortgage.

Get expert remortgage advice from our fee free mortgage partners L&C

How can I prepare to port a mortgage?

Just like when you apply for a mortgage, if you’re porting a mortgage you should get yourself in the best position of your application being accepted.

You will undergo a credit check when you apply to port your mortgage, so ensure everything in your credit report is correct and to boost your credit score if you can. Find our more on this in our guide 11 tips to improve your credit score for a mortgage.

How long does porting a mortgage take?

If your lender is happy for you to port your mortgage, it typically takes 1-3 months to complete.

How can I decide whether porting a mortgage is right or not?

To decide whether or not porting a mortgage is right for you, there are factors to consider including:

• Costs you may need to pay such as early repayment charges
• What other mortgage deals are available?
• Would you still qualify for your lender’s lending criteria?
• Could you get a better overall deal elsewhere if you want to borrow more?

But you don’t need to work this out yourself. It’s a good idea to speak to a fee-free mortgage broker. They’ll search the market for the best deals, do the calculations for you and explain your options.

Get fee free expert advice on your mortgage options today:

What happens if there is a delay between selling and buying?

If the sale and purchase doesn’t happen simultaneously, most lenders offer a period of grace, usually up to 30 days. If the delay is longer, most won’t allow you to port your current deal. However, if you opt for a deal with the same lender, they may offer to refund any early repayment charge you’ve paid.

See our guide for more advice on the full process of buying and selling at the same time.

Is there a porting a mortgage calculator I can use?

It may be helpful to get an idea of what the loan to value ratio would be if you want to increase your mortgage. But, ultimately, if you want to port a mortgage you’ll need to speak to your lender or speak to a mortgage broker and they’ll explain your options.

Get expert remortgage advice from our fee free mortgage partners L&C

What if my mortgage isn’t portable?

If you’re currently locked into a mortgage deal and it’s not portable, you’ll either need to pay any fees to leave your current deal or stay put.

But don’t assume you’ll need to pay an early repayment charge if your mortgage isn’t portable. For example, in many cases, if you’re on your lender’s Standard Variable Rate you won’t be able to port your mortgage, you’ll need to take out a new deal. But if you are on the Standard Variable Rate, you won’t usually need to pay an early repayment charge (although always check). And even if you can port, by switching to a new deal you may find you can get a much cheaper rate – the easiest way to find out is by speaking to a mortgage broker.

I can port my mortgage – but should I switch if I find a better rate?

This will depend on your circumstances. If you took out a mortgage on a high interest rate and can find a better rate now then you may be tempted to remortgage. But it’s crucial that you take into account any early repayment charges. The best course of action is to speak to a fee-free mortgage broker as they’ll crunch the numbers for you so you’ll know which is best for you.

For free mortgage advice see our award winning mortgage broker service:

Frequently Asked Questions