Moving Home? Here’s How to Take Your Mortgage With You
If you’re planning to move home and already have a mortgage in place, you might be wondering whether you can take your current deal with you.
Porting a mortgage allows you to transfer your existing mortgage product to a new property. This means you can keep your current interest rate and avoid paying early repayment charges, all while simplifying the transition between properties.
But just because porting a mortgage is possible doesn’t always mean it’s the best route.
Lenders will still carry out affordability checks, and not every mortgage product is portable.
What does porting a mortgage mean?
Porting a mortgage means transferring your current mortgage deal to a new property. You pay off the existing mortgage when your current home is sold and then take out a new mortgage with the same lender on your new home, keeping the same rate and terms for the portion that is ported.
It’s a popular option for people who have secured a favourable fixed or tracker rate and want to avoid higher market rates or exit fees. It can also be helpful if your mortgage includes features that would be difficult to replicate in a new deal.
However, it’s important to remember that porting a mortgage is technically a new application. You’ll still need to meet your lender’s current criteria and go through a full approval process so it is not guaranteed to be successful.
Find out Your Options
Why you might want to port your mortgage
There are several reasons why porting your mortgage could be the right move:
- You want to keep your current interest rate, especially if rates have risen.
- You’d like to avoid early repayment charges that would apply if you switch to another lender.
- You already have a non-standard mortgage product that suits your situation and would be difficult to replace.
For many homeowners, retaining a low fixed rate or tracker deal can lead to savings over time. But it’s important to weigh this against other factors, like whether you might be able to find a better rate elsewhere.
How does mortgage porting work?
When you port your mortgage, you’re asking your lender to transfer the same mortgage product to a new property.
This doesn’t mean your loan physically moves, instead, you repay your current mortgage from the proceeds of the sale and then take out a new mortgage with the same lender under the same terms.
You’ll need to:
- Submit a new mortgage application to your lender
- Pass affordability and credit checks
- Arrange a valuation of the new property
- Confirm the loan amount and any additional borrowing required
If your circumstances have changed since your original application, such as a change in income or employment status, your lender may reassess your eligibility and could decline the request.
This is where speaking to a broker can really help. We’ll assess your current position, explore your lender’s requirements, and help you decide whether porting is a viable and beneficial option.
What happens if you’re moving to a more expensive property?
If the new property costs more than your current one, you might need to borrow more. This is where things can get more complex. You can usually port the existing mortgage amount on your current terms, but the additional borrowing will be arranged separately, often with a different interest rate and repayment period.
You’ll effectively end up with two mortgage parts:
- One for the original amount, on your existing deal
- One for the top-up, on a new product based on current rates
Having two parts with different terms can add a bit of complexity down the line, especially if you decide to remortgage in the future, as the products often end at different times. That’s why it’s essential to understand the long-term implications before committing.
At Kerr & Watson, we’ll help you explore all your borrowing options and calculate whether porting plus additional borrowing is better value than switching to a completely new mortgage.
What if you’re moving to a cheaper property?
If you’re downsizing, porting your mortgage might still be possible, but there are a few things to be aware of. If your new mortgage balance is lower than your current one, your lender might apply early repayment charges to the difference that isn’t ported.
For example, if your current mortgage is £300,000 and your new home only requires a £200,000 mortgage, you may have to pay an early repayment charge on the £100,000 difference.
However, many lenders offer an overpayment allowance, often up to 10 percent, which can help reduce these charges.
You can check your current mortgage terms to see what you can overpay, and we can then guide you on the most cost-effective way to approach this kind of move.
Factors that affect your ability to port
Porting a mortgage is not always guaranteed. Your lender will consider several factors when deciding whether to approve the application:
- Affordability: You’ll need to prove you can still afford the mortgage based on your current income and outgoings.
- Credit history: Your credit score may be checked again. If it has dropped significantly, the lender could reject your application.
- Employment: If you’ve recently become self-employed or changed jobs, your new income may be assessed differently.
- Property type: Some lenders are cautious about lending on non-standard or unusual properties so your next property would need to meet the lender’s criteria.
- Loan-to-value (LTV): If your new property has a higher LTV, it may be considered riskier by your lender.
This is why it’s so important to speak to a mortgage broker before making any decisions. We can liaise with your lender, assess your current eligibility, and identify any red flags before you apply.
Costs involved with porting a mortgage
Although you may avoid early repayment charges by porting your mortgage, there are still some costs to consider:
- Valuation fees for the new property
- Legal fees for the conveyancing process
- Potential arrangement or product fees for any top-up borrowing
- Charges related to transferring the mortgage including mortgage broker fees
These costs vary depending on the lender and your individual case. We’ll help you understand the full picture.
Alternatives to porting
While porting can be a great option for some, it’s not always the most financially beneficial route. You could consider:
- Taking a mortgage a new lender who may offer a more competitive rate
- Paying early repayment charges and starting fresh with a new mortgage product
- Taking out a different type of finance if you’re not quite ready to buy a new home
It’s worth comparing all available options to ensure you’re getting the best deal possible. Our team at Kerr & Watson will review your current deal, analyse your future goals, and present clear recommendations to suit your needs.
Should you port your mortgage?
Porting your mortgage can make perfect sense in the right circumstances. If you’ve got a very competitive fixed rate, want to avoid early repayment penalties, and your lender agrees to the terms, it can be a smooth and cost-effective way to move home.
But it’s not always straightforward. If your financial situation has changed, or if you need to borrow more, your lender may reassess your affordability or offer less competitive terms for the extra borrowing. You might also find better overall value by remortgaging.
At Kerr & Watson, we take the time to understand your full situation before giving tailored advice. We’ll run the numbers, compare your options, and help you make an informed decision about what’s right for you.
Conclusion
Porting your mortgage allows you to move home without losing your current deal, but there’s more to it than just transferring a loan.
You’ll still need to reapply, meet your lender’s criteria, and weigh up whether it’s truly the most cost-effective route.
If you’re thinking about moving and want to explore whether porting is right for you, get in touch with Kerr & Watson. Our experienced advisers will give you clear, honest guidance and support every step of the way.
Contact Kerr & Watson today for tailored mortgage advice.
