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… 

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… 

Mark Gordon
From the Mortgages team
7
minute read
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Posted 7 JUNE 2021

What does porting a mortgage mean?

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? 

​Even if your mortgage is portable, there’s no guarantee your lender will let you move it. If they do, there’s a number of things to watch out for.

You have to reapply
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.

You could end up paying more interest
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. But you’ll need to consider any penalty fees for leaving your current mortgage early.

If you borrow more, you could end up with two mortgages
If you need to borrow additional cash, your lender might not let you add the extra amount to your existing mortgage. They may insist you take out another mortgage on top of the one you already have. You’ll probably need to pay another arrangement fee and may even be charged a higher interest rate.

You might not be able to borrow more
On the other hand, your lender might refuse to lend you any more money, especially if you’re close to the maximum they’re willing to lend you.

How to begin porting your mortgage

If you decide to keep your existing mortgage when you move to another property, you’ll first 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.

Since new affordability rules were introduced in 2014, the mortgage application process is much stricter. It may be harder to port your mortgage to a new home if your financial circumstances have changed: for example, you’ve changed jobs, you’re on a lower income or you have considerably more expenses than before.

Approval of your application might also depend on the type of property you want to buy. Some lenders can be picky about unconventional properties that may be more difficult to sell on.

If you pass the application process and your lender is happy to port your mortgage, the process usually takes up to three months to complete. 

Your home may be repossessed if you do not keep up repayments on your mortgage.

Frequently asked questions

What are my options if porting isn’t the right answer?

You have two alternative 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. 

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 for you.

What happens if I need a larger mortgage?

If you’re moving to a bigger home, it’s likely you’ll 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, which may be at a higher rate of interest. 

If you have to take out a second mortgage, you’ll probably have to pay arrangement fees and make repayments on two mortgage deals simultaneously. Also be aware that if the two products have different finishing dates, you could end up paying a higher rate of interest on the one that ends the earliest. 

Porting your mortgage this way can be a complicated and costly process. It’s important to work out whether this makes more sense than taking out a new deal with a different lender.

What if I want to port my mortgage to a cheaper property?

If you’re downsizing or moving to a cheaper area, porting your mortgage might seem like a simpler option. The problem here is if the Loan to Value (LTV) percentage goes up. LTV is, essentially, the size of the mortgage your lender is prepared to offer in relation to the value of your property.

Let’s say your current property is worth £200,000 and your existing mortgage is for £150,000. Your LTV would be 75% - in other words, you’re borrowing 75% of your property’s value. If your next home is valued at £175,000, but your mortgage loan stays at £150,000 your LTV would be higher – over 85%. Your lender might not be happy with this higher percentage and may insist you pay off some of the mortgage to keep the LTV at the original 75%.

Can I switch to a new deal instead of porting? 

Whether you can or can’t port, you might still think it’s better to look around for a cheaper deal. But you’ll need to work out if it’s makes financial sense to leave your current mortgage and take out a brand-new deal elsewhere.

How long you have left on your current deal could make a big difference to the amount of fees you’ll need to pay. For example, if you’re two years into a five-year fixed mortgage, the early repayment charge (ERC) is likely to be much more than if you only have a year left before it ends. Typically, the earlier you leave a deal, the higher your ERC will be. The difference between paying 5% instead of 1% of your outstanding debt could be thousands of pounds.

You’ll also need to factor in an exit fee, which nearly all mortgage lenders charge, and arrangement and valuation fees for your new mortgage.

Add these up to work out if it’s worth ditching your current deal for a new one. If you can port, you have the choice of going for the option that makes more financial sense. If you can’t port your mortgage and you can’t afford to get out of your current deal, you may have to face the fact that you’re a ‘mortgage prisoner’ and won’t be able to move home for a while. 

Keep an eye on your credit score 

Before you decide whether to port your mortgage or look for a new deal, it’s essential that your credit score is up to scratch. Whether you’re sticking with your current lender or switching to a new provider, they’ll check how you’ve been handling debt and managing your finances over the past few years. This includes any credit card applications, missed payments or even late payments of utility bills.

It’s worth checking your credit file before making a new mortgage application in case there are any errors or past credit issues you weren’t aware of.

Find out how to check your credit rating in our guide to free credit checks.

Compare mortgages 

​To find out if porting your mortgage or taking out a new mortgage 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.

Mortgages are complex financial products and working out the sums can be overwhelming. If you’re not sure if porting is the right answer for you, contact our partners at London & Country Mortgages Ltd (L&C)** for fee-free, expert mortgage advice. They’ll take you through your options and help you work out the best financial solution for your circumstances. 

Go to L&C Mortgages

**London & Country Mortgages Ltd (L&C) are a multi-award-winning mortgage broker with over 20 years’ experience in helping people secure their perfect mortgage. Advice is provided by L&C, who are authorised and regulated by the Financial Conduct Authority (143002). L&C are not part of Compare the Market Limited. Compare the Market receive a % of the commission that our partner London & Country earns. All applications are subject to lending and eligibility criteria.

L&C will not charge you a broker fee should you decide to proceed with a mortgage.

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