Moving home can be exciting but it is notoriously stressful. One of the hurdles perhaps playing on your mind more than others is the mortgage. Should you search for a new one or see whether you can move, or “port” your existing mortgage deal to the new property?

Porting a mortgage is where you take your current mortgage deal, (not the cash itself), and have it applied to your new home. This allows you to keep your current interest rate and any other features that your agreement came with. For many, this can be a great way to keep costs down, especially if rates have been fluctuating a lot. But there is no guarantee that your chosen lender will say yes.

Below we dive into porting a mortgage, what it is and how it works, so you know if this is the option for you when you buy a new home.

How does porting a mortgage work?

Porting a mortgage means transferring the terms of your current mortgage deal to a new property. This includes your interest rate, fixed-rate period, and other terms. It’s essentially keeping your existing mortgage deal when you move house.

Below we have broken down porting a mortgage in to key points:

• You are transferring the loan: The actual mortgage loan itself isn’t moved. You pay off the old one and take out a new one with the same terms.  
• Reapplication is necessary: Even though you’re keeping the same deal, you’ll need to reapply for the mortgage. Your lender will assess your financial situation again.  
• Potential for additional borrowing: If your new property is more expensive, you might need to borrow more. The extra amount typically won’t have the same interest rate as your ported mortgage and will be on a new deal.  
• Not guaranteed: While many mortgages are portable, there’s no guarantee your lender will allow it. They might decline your application based on their lending criteria.  
• Potential downsides: You might be locked into one lender and miss out on better deals available elsewhere.

How do you know if you can port your mortgage?

Many mortgages these days are portable, but it will always be best to check with your lender when you first apply to see whether your chosen product has this as part of its offering.

If it is, you can apply to move it to a new property when the time comes for you to move house. As you need to reapply, there is every chance you may be turned down, but this could be for a host of reasons. If your affordability has changed, the lender may not be open to porting, likewise, a lender may have changed their eligibility criteria, and no longer see you as suitable even if your income and credit score have improved.

Why port a mortgage?

The mortgage deal you are currently on may be significantly better than anything else currently available so it wouldn’t be beneficial to take a more expensive product. Porting can also help you escape the early repayment charges often found on mortgages. By porting, even though you are taking out a new loan, it’s fundamentally the same loan which continues on your new home. If you chose to remortgage instead, it’s a different mortgage, meaning the old one is cleared and replaced, making an early repayment charge likely.

Can you port a mortgage to a more expensive property?

House prices can fluctuate, meaning that by the time you want to port your mortgage, you could find that a similar home now costs a lot more. Or as is more common, your wish to upgrade to a bigger home means you need to pay more to obtain it. As a result, porting can prove tricky. You may need to borrow more money, and the lender may not be willing to add further cash to the mortgage loan. If they do offer you a more money you will have to choose a new rate on the extra money borrowed, this will give you two rates on the same mortgage. One ported, and one completely new deal on new terms. There will be a variety of fees to consider here, especially if a new mortgage product must be used too.

This can be complicated so it would be advisable to speak to our experts here so we can help you find the best solution.  

Can you port a mortgage to a cheaper property?

You may be looking to downsize and porting a mortgage can be useful here. As you do not need to borrow any additional cash, the lender may look at things more favourably. You’ll still need to pass their checks for affordability to be approved though so don’t just assume you’ll be approved.

How much does it cost to port a mortgage?

If your lender is willing to port the mortgage deal, there will be a few fees to cover. These vary per lender but will typically involve arrangement and valuation fees. There is no such thing as a porting fee so it would be wise to avoid any lender that may try and factor those into the equation, you’d simply be giving them cash for nothing. It’s hard to give an estimate of how much your total fees will amount to as both the value of the property and the lender means they will vary from case to case.

Is porting a mortgage a good idea?

It can be! It’s a handy way to avoid early repayment charges as you aren’t breaking your current deal and if your interest rate is lower than what new mortgage deals are offering, you’ll be saving even more.

Before committing though, you should look at what the current interest rates are. If your current rates aren’t attractive when compared to new rates, it can work out better to pay an exit fee and take a new mortgage product. This isn’t a decision you should rush into though and should be talked through with a mortgage specialist first.

Is a new mortgage better than porting?

Sometimes. As mentioned above, if the mortgage you are on is costing you more than what is currently available, it would make sense to move to a new product. You could also look at a new mortgage if you are currently on an SVR as there would be no ERC if you moved.

How long does it take to port a mortgage?

If you meet the lending criteria and pass the application process, you can see a mortgage ported in approximately three months. You should be aware that many lenders will remove the ported mortgage and have you apply for a new mortgage product if you cannot complete your purchase within 180 days of you paying off the existing mortgage.

Can you port any type of mortgage?

Many mortgages are portable, but it is always advisable to check with your lender in advance, otherwise, things could get costly. It will also depend on what is left of your current deal.

Porting a mortgage and borrowing more money

If you are porting your mortgage but need to borrow more to pay for the home, you may, as we have said earlier, in effect have two loans. One that is the ported mortgage deal, and one that is for the remaining balance. With this, you’ll not have an ERC to pay.

Let’s say you sell your existing home for £200,000, the new home is £300,000 and you have an existing mortgage of £150,000. The £150,000 mortgage is ported to the new home. The equity from the sale of your old home, (£50,000), goes towards the new home purchase. This leaves you with £100,000 needed on a new mortgage deal to cover the entire property cost. However, don’t forget if you do not have savings to cover it, you will also have fees to cover such as stamp duty, solicitors fees for buying and selling and estate agents fees.

Porting a mortgage and borrowing less money

If you need to borrow less cash than the amount on your existing mortgage, you can port and have a smaller loan, however an ERC is likely. This is because there will be money left on the mortgage loan that is no longer needed and as a result becomes subject to an early repayment charge.

For example, the new home you want is £200,000 but the home you currently live in is valued at £300,000. You have an existing mortgage of £200,000 on the existing property and £100,000 equity when it sells.

Due to the £100,000 equity going into the new purchase, your ported amount will now only be £100,000, this leaves £100,000 of existing mortgage product that is no longer needed and is therefore paid back early, incurring the charge.

Mortgages can be complicated and that is why we are here to support you. Whether you need help remortgaging your house, want advice on mortgage porting, or are pondering equity release, our experienced team can keep you on the right path and help you find the best deal for your property plans. As a free mortgage broker we can help with all financial elements relating to property.