Porting a mortgage
We are selling and hope to carry over our existing mortgage to our new home. But is porting a mortgage when you move a good idea? What are the pros and cons?
Most mortgage deals are portable, which means that they can be taken to another property when you move without changing the terms of the deal.
Reasons for porting a mortgage
- Porting a mortgage can be desirable for those with a very attractive mortgage rate that they want to keep.
- It is also 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 charges, it may be possible to port the mortgage to the new property.
If you’re not sure whether to port a mortgage when you buy a new property, then speak to a fee-free mortgage broker. They’ll be able to work out whether it’s more cost-effective to take your deal to your new home, or to switch away from your existing mortgage to a different deal altogether.
Remember that the mortgage market is constantly changing, so whilst your existing mortgage might have been a best buy at the time you took it out, better deals may now be available.
Porting a mortgage explained
Porting your mortgage across to another property involves more than changing the address details.
You effectively have to reapply for your mortgage, even if you’re not changing the term or the amount you’re borrowing.
It’s worth noting that lenders will reassess you to ensure that you can afford the mortgage, even if there is no increase to the borrowing requirement.
The lender will also need to carry out a valuation of the property you’re purchasing too, to confirm that it provides adequate security for them to lend against.
Once the lender has assessed your application, they’ll tell you if you’re able to port your mortgage or not.
If you are not able to demonstrate an adequate total household income to meet the lender’s affordability criteria, the lender may not be willing to agree to port the mortgage, even though you can continue to meet your monthly payments.
What if my lender refuses to let me move my mortgage to a new property?
If your application to transfer your mortgage to your new property is refused, then you’ll have to weigh up whether it’s worth paying the early repayment charges on your current mortgage to move to a different lender, or whether you’re better off staying put until your existing deal finishes.
What if I want to port my mortgage and borrow more?
If you’re moving to a new home which requires a bigger mortgage, you may be able to take a top up on a current rate. You’ll have to check with your mortgage provider that they’ll agree to lend you the additional money you need.
If you do need to borrow additional funds, try to make sure that the term of your top-up deal ends at around the same time as your current mortgage, so that at that point you can remortgage the whole amount onto the same deal.
In summary, yes you can usually take your mortgage with you when you move. But new mortgage deals are constantly being released so whilst your existing mortgage might have been the best deal at the time, you’ve got nothing to lose by checking whether better deals are available before you commit to porting your mortgage. You can do this online or over the phone now with mortgage experts at L&C