How does porting a mortgage work? If you’re moving home and want to keep your current mortgage deal, you might be able to transfer it to your new home. This is called ‘porting’ your mortgage, but how does it work?
‘Porting’ means your existing mortgage rate and all of its terms and conditions go with you when you move.
Not all mortgage products are ‘portable’ and there might be some circumstances where porting isn’t right for you. Read on to find out all you need to know about how does porting a mortgage work.
What is porting a mortgage?
Porting a mortgage is the process of moving your existing mortgage loan from one property to another when you move house.
Not all mortgages are portable – although most are. Your lender will be able to tell you whether your mortgage is portable or not.
How do I port a mortgage?
When you port your mortgage to a different property, you’ll need to arrange this with your current mortgage lender.
Your lender will talk you through the steps to porting your mortgage. The process is very similar to getting a mortgage in the first place – you’ll need to meet your lender’s lending criteria and the lender will also need to be happy to lend on the property in question.
There’s not normally a fee to port your mortgage but you may need to pay a valuation fee.
Why would you want to port a mortgage?
There are two main reasons why you might want to port your mortgage when you move home:
- You are tied-in to a fixed rate and would have to pay early repayment charges (ERC) to leave early
- You are on a favourable interest rate that you want to keep
What might stop you porting a mortgage?
Just because your mortgage is portable, it doesn’t mean you can definitely port it to another property at any time. The mortgage lender will need to underwrite the loan again – so both you and your new home will need to meet its approval.
The lender may turn down your porting request for any of the following reasons:
- Your income or employment status has changed
- You fail the affordability assessment because your financial commitments have changed
- Your credit score has gone down
- There is an issue with the new property which means the lender won’t lend on it (for example, it is uninhabitable or has structural problems)
- The lender’s valuation concludes that the new property isn’t worth the mortgage amount
Can I port a mortgage to a more expensive or cheaper property?
If you need a bigger mortgage on your new home than you have on your current one, you’ll need to top up your mortgage with additional borrowing. This is likely to be at a higher rate than your current mortgage. Ideally, you’ll have cash savings to cover the price difference.
If you are porting to a cheaper property, you could be in a position to reduce your mortgage amount. Check your mortgage for terms and conditions regarding making early repayments, and whether a fee applies.
What happens if my mortgage lender won’t let me port a mortgage?
If you can’t port your mortgage, you can either:
- Pay the early repayment charges to exit your mortgage deal early, find a new mortgage and move house as planned
- Wait until your mortgage deal expires and you are free to leave penalty-fee before moving house
Should I be porting a mortgage?
Before deciding to port your mortgage when you move home, check if there are better mortgage deals out there for you.
A broker can help you do the sums and work out if you can save money by moving to a different mortgage lender or different mortgage product instead of porting your existing deal.
Always remember that your home may be repossessed if you do not keep up repayments on your mortgage.
Last Updated: December 15th, 2022