Alternatives to porting – can you transfer your mortgage to another bank instead?
As we have already seen, porting can be a great option to have on your mortgage, but are there any other options you could consider?
The alternative is essentially to take out a new mortgage with a different lender, which is known as re-mortgaging. You would use the new mortgage amount to pay off the old mortgage in full and even have some to spare for home improvements.
However, this may not be suitable as your existing lender may force you to pay early repayment charges in these circumstances. Early repayment charges are usually payable in the early years of a mortgage deal, and are often linked to the period for which the mortgage rate is discounted, capped or fixed. If you are considering switching lender, then you need to find out if there are any early repayment charges on your existing deal, and if so, how much you would need to pay. These charges could be as much as 5% of your outstanding mortgage amount, especially if the deal is in its first couple of years.
Almost every mortgage deal also requires you to pay an exit fee on termination, which is typically a few hundred pounds.
It’s then important to weigh up whether the exit fees and early repayment charges make it worthwhile moving to a new mortgage.
Remember also that if you take out a new mortgage deal, you could have to pay arrangement fees on that deal – so factor those into your calculations.