When you're moving home, one of the key questions you'll face is whether to take your existing mortgage with you or apply for a new deal. While some mortgages are portable, meaning you can transfer your current mortgage product to a new property, there are several factors to consider before deciding if porting is the right option for you.
What is Porting a Mortgage?
Porting a mortgage means transferring the terms of your existing mortgage deal to a new property. If your mortgage is “portable,” it may allow you to keep your current deal, avoiding the need to take out a completely new mortgage. However, just because your mortgage is portable doesn’t mean you’re able to do it. You’ll still need to meet the lender’s criteria and potentially reapply.
Why Porting Might Not Always Work
Here are a few reasons why porting might not always be the best or most viable option:
- Reapplication Process: When you request to port your mortgage, you’ll need to go through the reapplication process, and there’s no assurance that your lender will approve the transfer. If your circumstances have changed (e.g., you’ve become self-employed, have a lower income, or higher debts), the lender might not approve your application.
- Increased Borrowing Needs: If you’re moving to a more expensive property, you may need to borrow more than your current mortgage balance. However, the lender may not approve this additional borrowing, or they may split your mortgage into two separate loans, each with its own terms and potentially a higher interest rate.
- Interest Rates Could Be Less Competitive: If you do manage to port your mortgage, you might find that the rates on offer are not as competitive as what you could secure by applying for a new mortgage with a different lender. This could leave you paying more in interest in the long run.
- Lender Criteria May Have Changed: Even if your mortgage was easily approved in the past, the lender’s criteria may have changed. If you’ve missed payments or your financial situation has shifted, you could be denied porting, or you might find yourself locked into a less favourable deal.
How to Prepare for Porting Your Mortgage
To increase the likelihood of a successful port, there are several steps you can take:
- Review Your Mortgage Application: Before selling your current property, check your financial situation and read our Boost Your Mortgage Chances guide to ensure you meet the criteria for porting. If you think you’ll need to borrow more money, prepare accordingly.
- Get Your Property in Order: Start the process of selling your property as soon as possible. The sooner you have an offer accepted, the sooner you can begin searching for your next home with a clearer idea of what you can afford.
- Have a Plan B: If porting isn’t an option, you may need to consider applying for a new mortgage. Be aware of early repayment charges (ERCs) if you decide to break your current mortgage deal early.
Porting vs. Remortgaging: What’s Best for You?
If you can’t port your mortgage, you may want to consider remortgaging instead. While remortgaging involves switching to a new lender and potentially facing additional costs (like ERCs), it can sometimes be the better financial option. In some cases, remortgaging may offer you more competitive rates, particularly if you’re looking to borrow more or your financial situation has changed.
The Bottom Line
Porting your mortgage can offer some great benefits, but it’s not always the best option depending on your circumstances. Whether you’re considering porting or remortgaging, it’s important to speak with an expert to evaluate your options and find the best mortgage deal for your situation.
At Ingrid Cairns & Associates, we can help you navigate the process, whether you’re looking to port your mortgage, apply for a new deal, or just need advice on your next steps. Contact us today to discuss your options.
Questions to Consider:
- Are you planning to borrow more when moving to a new property?
- Do you want to keep your current interest rate, or are you open to exploring new deals?
- Have you considered the potential costs of switching mortgages, such as ERCs?
If you’re considering moving home, it’s worth taking the time to evaluate your mortgage options thoroughly. We can help you make an informed decision and ensure you’re getting the best deal for your circumstances.
Your Home may be repossessed if you do not keep up repayments on your mortgage. Ingrid Cairns & Associates Limited is an Appointed Representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority. A Fee May Be Charged For Mortgage Advice. The Exact Amount Will Depend On Your Circumstances But It Will Not Exceed £495.
