Porting a mortgage
Porting a mortgage
If you’re moving home, you might be able to ‘port’ your existing mortgage instead of arranging a new one. Read our guide to get an idea of your mortgage options when you move…
What does it mean to ‘port’ your mortgage?
If you’re moving home, it’s possible, in some cases, to take your existing mortgage with you. This is known as ‘porting’.
While porting can be an attractive option, it should be considered alongside alternatives, such as moving to a different lender offering a more competitive deal.
When is it a good idea to port your mortgage?
If your existing mortgage has a competitive interest rate, then porting your mortgage can be a great option. It’s also possible that you’ll have less paperwork to complete, as your lender already has your information on file.
Porting a mortgage can be a good idea if you face significant early repayment charges for leaving your current deal early. You could be charged a fee by your lender for porting your mortgage, but it may still work out less than any penalties you might have to pay for exiting your current deal.
What should you watch out for when porting your mortgage?
You’ll need to go through an application process to ‘port’ a mortgage as it’s technically a new deal. This means you could be rejected if your circumstances or the lender’s approval criteria have changed. If you need to borrow more money, the additional borrowing may be on a higher interest rate than the mortgage you’re porting.
If your current deal isn’t competitive and there are better rates available elsewhere then you may want to consider a new mortgage, although you’ll need to consider any penalty fees for leaving your current mortgage early.
How to begin porting your mortgage
If you decide to keep your existing mortgage when you move to another property, you’ll need to check with your lender to see if this is possible, as some mortgages aren’t portable.
If you’re able to go ahead, your mortgage provider will carry out a re-assessment of your financial circumstances. This is a similar process to applying for a new mortgage and will include an affordability check (to ensure you’re able to meet the monthly repayments) and an assessment of your credit profile.
It may be harder to port your mortgage to a new home if your financial circumstances have changed: for example, your employment status is different, you’re on a lower income or there’s been a significant increase in your expenses, such as those associated with the birth of a child.
What happens if I need a larger mortgage?
If you’re porting your mortgage but need to borrow more money, your lender will either agree to increase your existing mortgage or confirm you’ll need to take out a second mortgage at a higher rate of interest.
If you have to take out a second mortgage, you’ll have to pay any arrangement fees and make repayments on two mortgage deals simultaneously. It’s important to work out whether this makes more sense than switching to another provider.
What are my options if porting isn’t the right answer?
You have two options to porting your mortgage:
- Take out a new deal with your current lender to replace your existing mortgage
- Take out a new mortgage with a different lender, which is known as switching or remortgaging.
Check with your current lender how much you’d have to pay in early repayment charges if you end your current arrangement. These charges could be as much as 5% of your outstanding mortgage amount, especially if the deal is in its first couple of years.
You’ll also need to go through the affordability checks when you apply to switch from one mortgage to another.
Mortgages are complex financial products, so it’s important to take your time to find the best deal.
To find out if porting your mortgage or remortgaging is the right option for you, it’s a good idea to shop around. Compare from a wide range of providers using our mortgage comparison service.