If you’re moving house with an existing mortgage, you might be wondering if it’s possible to take your current mortgage deal with you. This is where porting a mortgage comes in. Porting your mortgage means transferring the terms of your current mortgage to a new property. In this guide, we’ll explain how porting works, what happens when you port, and what to consider before deciding if it’s the right option for you.
How does porting your mortgage work?
Porting a mortgage allows you to keep the same interest rate, terms, and conditions when you move to a new property. Instead of paying off your current mortgage and getting a new one, porting transfers your existing mortgage to your new home. This can save you from paying early repayment charges or taking on a new mortgage deal with different terms.
However, porting isn’t always as straightforward as it may sound. Your new property must meet the lender’s criteria, and you may need to go through a new application process, including a property valuation. Additionally, if your new property is worth more than the old one, you may need to borrow extra money to cover the difference. In that case, you would need to negotiate additional borrowing with your lender.
Can I port my mortgage?
Most homeowners can port their mortgage, but it depends on your lender and the type of mortgage you have. Generally, fixed-rate and tracker mortgages are more likely to be portable, but you should always check with your lender. There are some restrictions and conditions, such as ensuring that the new property meets the lender’s criteria and that you are still eligible for the loan amount you need. If you’re unsure whether porting is available to you, it’s a good idea to speak with a mortgage broker or your lender.
How long does it take to port a mortgage?
Porting a mortgage can take a bit of time, as the process involves a property valuation, underwriting, and a re-assessment of your finances. Typically, it can take anywhere from four to six weeks, although the time frame can vary depending on the lender and your individual circumstances. If you need to borrow additional funds or if there are any complications with your new property, it may take longer.
Different types of porting
There are a few different options when it comes to porting your mortgage, depending on your needs and the lender’s rules. Here’s a breakdown:
Porting with additional borrowing
If you want to buy a more expensive home than your current one, you may need to borrow extra money. This is called “porting with additional borrowing.” If you qualify, your lender will offer you the same mortgage deal on the original amount of the loan, and a new deal for the additional borrowing, which could be at a different rate.
Partial Port
If your new home is cheaper than the one you are selling, you might only need to transfer part of your mortgage. This is known as partial porting. You’ll only port the amount you want to keep, and the rest of the mortgage will be paid off. However, make sure you understand the terms for any remaining balance, as it may involve early repayment charges.
Like-for-like porting
Some lenders allow “like-for-like” porting. This means transferring the full amount of your mortgage to a property with similar terms and conditions as your original mortgage. If your property is more expensive, you may have to apply for additional borrowing, but your existing rate and terms will stay the same on the original amount.
What happens when you port a mortgage?
When you port your mortgage, you keep the same deal with your current lender, which can be advantageous if your mortgage rate is lower than what’s available on the market. However, if you’re moving to a more expensive property, you’ll need to get approval from your lender to borrow more money, which could mean a different interest rate or higher monthly payments.
It’s important to note that if you fail the affordability checks for the new property, you may not be able to port the mortgage. You could be offered a new deal, but this may come with a higher interest rate and fees.
Is it easy to port a mortgage?
Porting a mortgage can be a relatively easy process if your lender allows it, but it’s not without its challenges. While the idea of keeping your current mortgage deal sounds appealing, there are factors to consider such as affordability, property valuation, and whether additional borrowing is needed. Sometimes, the extra steps involved may make remortgaging a better option if porting seems too complicated.
How do I port my mortgage?
To port your mortgage, follow these general steps:
- Check with your lender: Ask your lender if porting is an option for your mortgage type and whether your new home meets their criteria.
- Get your home valued: The lender will likely require a property valuation for the new home to ensure it meets their standards.
- Complete the application: You’ll need to apply for the mortgage port and undergo an affordability assessment. The lender will look at your financial situation, including income, expenses, and any outstanding debts.
- Agree on terms: If your new property is more expensive, you’ll need to discuss additional borrowing and what the terms will be. If your property is less expensive, make sure you understand how the remaining mortgage will be dealt with.
- Sign the contract: Once approved, you can sign the agreement, and the porting process will be complete.
Speak to a mortgage expert
If you’re considering porting your mortgage, it’s a good idea to speak to a professional mortgage broker. They can provide expert advice on whether porting is the right option for you and help you navigate the process. A mortgage broker can also help you compare different mortgage deals, taking your financial situation and future plans into account.
If you want to explore more about the mortgage application process or learn more about moving house, or how to apply for a mortgage, we’re here to help. Find a broker and speak to one of our trusted partners today to see how we can support your mortgage needs.