Can I port my mortgage to a cheaper property?

If you’ve found your dream home at a lower price, you will want to know whether your mortgage can come with you. Ideally speaking, you can move your mortgage to a cheaper home, but there are conditions. With a portable mortgage, the new loan is smaller, so you must repay the difference. This may lead to early repayment charges after the lender checks your home and income.

A portable deal can make you move, but the approval is uncertain. That’s why it’s important to understand the steps and costs before applying.

What is mortgage porting?

In simple terms, mortgage porting means taking your current mortgage with you when you buy another home. Instead of ending the deal and starting again, you keep the same terms for your new property.

Many lenders design their products as portable mortgages, which give you flexibility. This means you can move without losing your current deal.

To handle this well, it helps to know everything you need to know about mortgage porting, including the checks and conditions that lenders apply.

Can you port a mortgage to a cheaper property?

Yes, you can port a mortgage to a cheaper property. In this case, the new loan is usually smaller than the balance on your current mortgage. The difference has to be repaid, and if it is more than your allowance, it can lead to early repayment charges.

The pros and cons of porting to a cheaper property

Porting has benefits, but there are also some drawbacks

Advantages

You keep your current interest rate.
No need to set up a brand new mortgage.
A portable mortgage offers continuity when moving.

Disadvantages

Extra repayments may lead to early repayment charges.
Lenders still carry out affordability and property checks.
Mortgage portability may not always be cheaper than remortgaging.

When you might have to pay an early repayment charge

An Early Repayment Charge (ERC) is a fee you may need to pay if you repay part or all of your mortgage earlier than agreed. Lenders add this fee because they lose interest when you pay back too soon.

You might face an ERC in these situations:

Paying off your mortgage early – before the fixed or discount period ends.
Overpaying beyond your allowance – most lenders let you pay up to 10% of the balance each year without charge. Anything above this usually triggers an ERC.
Switching or remortgaging early – leaving your current deal before it finishes.
Moving home without fully porting your mortgage – if the balance you repay is larger than your allowance.

ERCs are usually a percentage of your outstanding loan, often between 1% and 5%.

Understanding the overpayment allowance

Your overpayment allowance is how much you can repay each year without paying an ERC. For most fixed-rate deals, this is up to 10% of your outstanding loan balance.

How it works:

The allowance usually resets every year on the anniversary of your deal.
You can use it through regular extra payments or one-off lump sums.
If you pay more than the limit, an ERC applies to the extra amount.
You can check your mortgage offer or annual statement to confirm your allowance and reset date.

Example scenario: porting a mortgage to a cheaper property

Imagine you have a mortgage balance of £200,000 and want to move to a cheaper property where the new loan needed is only £170,000. You must repay £30,000.

If your deal allows 10% overpayment, you could repay up to £20,000 without charge. But the extra £10,000 goes over the limit and could trigger a fee. This shows why it’s important to understand your deal’s terms before porting.

Key steps to porting your mortgage

When you port your mortgage, you move your current deal to a new home. The process is not automatic. Your lender must check your finances and the new property. This makes it similar to applying for a new mortgage.

The key steps include:

A new affordability check to see if you can manage repayments.
A valuation of your new property to confirm it is suitable for lending.
Final approval, where the lender agrees to transfer your mortgage deal.

The new affordability check

Your lender will review your finances to be sure you can afford the loan. They usually look at:

Your income – wages, business profits, or other reliable income.
Your spending – regular bills, living costs, and credit commitments.
Your debts – loans, credit cards, or other borrowing.

This check protects you and the lender. It makes sure repayments fit your current finances.

Valuing your new property

The lender must also check the property. A valuation is carried out to confirm:

The market value shows the home is worth the price.
The property type, as non-standard homes may not be accepted.
The resale potential ensures it can be sold if needed.

Without a satisfactory valuation, the lender may not approve the porting.

Costs involved in mortgage porting

Porting your mortgage can be helpful, but it’s not always free. A main cost is the valuation fee, charged by lenders to confirm your new home is suitable security for the loan. These fees usually range from £100 to £800, depending on the lender and property value. You may also face legal fees for conveyancing. In some cases, an Early Repayment Charge (ERC) applies if you repay more than your allowance during the transfer. If you borrow more than your current mortgage, the extra part is often set up as a separate loan, sometimes at a higher rate. This can increase your repayments, so it’s important to check the full cost before deciding.

Porting vs remortgaging: which is right for you?

Porting can be a good option if your current interest rate is competitive and you want to keep it. It saves you from moving to a new deal that could be more expensive.

Remortgaging may be better if lower rates are available or if you want to borrow more without splitting the loan into two parts.

The best choice depends on your situation. Comparing the costs of both options will give you a clear view of what works for your budget and long-term plans.

Final thoughts

Porting your mortgage lets you move your current deal to a new home without starting a fresh one. But the process is not always simple. Costs, repayment limits, and lender checks can apply. Many borrowers wonder if it’s better to port their mortgage to a cheaper property or remortgage for more flexibility and savings.

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