So you are about to move home and you have an existing mortgage in place. If you redeem your existing mortgage deal you will get an early repayment charge which could add up to several thousand pounds. The question you need to ask yourself is if it’s better to take this hit and pay the charge or whether is it possible to avoid this by porting your mortgage to your new home.
Porting a mortgage means that you transfer the mortgage from your existing property over to a new property. This needs to be carried out very carefully to avoid paying early repayment charges!
In this guide, we will look at each step in porting a mortgage from your existing property to your new property. We will also cover whether it’s always best to port your existing deal to the new property. We will also give a few suggestions and ideas to make the process smooth and risk-free.
Is it possible to take your current mortgage with you?
Yes, it is very possible to take your existing deal and mortgage with you when you move home, this is called porting a mortgage. Below we delve into when porting is possible and how it works.
Buying a new home and moving your mortgage mortgage
How does porting your mortgage work? Porting your mortgage basically means taking your present mortgage rate with your current mortgage lender with you to your new home.
Not all mortgages are portable and therefore it is important to check. Look at your original mortgage offer with your existing bank or Building Society and it will clearly state if your mortgage is a portable mortgage or not.
Portable Mortgages – Is porting a mortgage worth it?
The answer to whether porting your mortgage is worth it will depend on the size of your mortgage and your existing mortgage rate and mortgage payments. If you do not take your mortgage with you, you will need to redeem it on the sale of the property. With most mortgage lenders charging you a fine known as an Early Repayment Charge (ERC) it can be expensive. Although each mortgage provider will charge a different amount the average early repayment charge is 3% of the mortgage. Therefore on a £150,000 mortgage, you will be charged a fine of £4,500! This can be avoided by porting your mortgage with you to your new property purchase.
Can I transfer my existing mortgage deal to another property?
It is slightly more complicated than a straightforward mortgage however a fee free mortgage broker will be able to help you with this. You will need to transfer the mortgage on your current property to your new home. If you are needing a larger mortgage you will need a top-up mortgage with the same provider to sit alongside your original mortgage. If you are wanting a cheaper property it may increase your loan to value.
It sounds more complicated than it is and with the help of an independent mortgage broker, it will be far easier and less stressful than you think.
Do you have to qualify when porting a mortgage?
You do need to requalify your mortgage when porting it. Your mortgage will be looked at as if it was a brand new mortgage and you will need to pass the lending criteria again. Since you started your mortgage you may have changed jobs etc and your income may have increased or even decreased. It might be the case that you have more dependents or maybe you may have more outgoings including loans and credit cards. Also, you will need to have a good credit rating to be able to port your mortgage. Plan your move as early as possible and call on a broker to give sound mortgage advice on how much you will be able to borrow and whether a house move will be possible.
Can I port my mortgage to a more expensive property?
You can port your mortgage to a more expensive property however the chances are that you will need to borrow more money and have a larger mortgage. To get a bigger mortgage your present income may need to be higher and you will need a good credit rating therefore we recommend that you get advice first. All mortgage lenders will make a decision on how much you can borrow with the help of a mortgage affordability calculator. You will need to get a new mortgage deal and pay the valuation fee alongside a new arrangement fee. Get your broker to run these figures for you so you can see how much you can borrow.
Below is a simple mortgage repayment calculator to work out your rough affordability. To get more of an exact figure tailored to your situation, contact our fee free mortgage advisors.
Find out more about how much mortgage you can borrow on a mortgage here. Alternatively, continue reading about mortgage porting below.
I only have a small mortgage, is it worth porting?
Sometimes it’s not worth porting a small mortgage but before you make a decision get a mortgage adviser to run the figures so you don’t make a hasty decision.
My interest rate is not very good is it worth porting?
If it is sometimes possible that you may be able to get a lower interest rate than you have on your current deal. Occasionally a new mortgage lender’s mortgage deals could be lower and this may lead to making a decision not to port your mortgage. It will depend on the savings you will make by getting a lower interest rate versus the loss made by paying the early repayment charges to get out of your current mortgage deal.
Summary on porting a mortgage
As we have already covered there are quite a few factors that come into play in deciding whether to port your existing mortgage deal or not. These include:
- The size of your mortgage.
- How good is the existing fixed or tracker rate on your current mortgage?
- The size of the fine that your existing lender will charge you for leaving them.
The good news is that the figures will give you a clear answer about whether to port or not to port your mortgage. It will be black and white as to what is best for you if you get good financial advice before you plan your move.
Use an Independent fee-free mortgage broker
This will bring you a list of brokers that will be able to help you plan your next move. Although lots of brokers charge a fee there are many that do not. Here is an example of a no-fee mortgage broker.
YesCanDo Money – Independent fee FREE mortgage brokers
YesCanDo Money is an FCA-approved fee FREE mortgage broker who offers a No-Fee mortgage service and financial advice in the UK. With over 30 years of experience in helping customers and a team of experienced mortgage advisors at hand to help you every step of the way.
YesCanDo Money is the UK’s highest-rated 5-star independent free mortgage broker. < Read the reviews to see how important customer care is to YesCanDo. With a modern approach to communication using Zoom and WhatsApp why not make contact and get your future move planned.
Frequently Asked Questions
Are Nationwide mortgages portable?
Most Nationwide mortgages are portable however the only way to be certain is to find your latest Nationwide mortgage offer and it should state clearly if the mortgage is portable or you will need a new mortgage from a new lender.
Are all mortgages portable?
Not all mortgages are portable. Although the majority of UK mortgages are portable the only way of being certain is to check the latest mortgage offer you received from your lender. The offer will clearly show if the mortgage is portable or if you will need a new mortgage from a new lender.
How do I know if my mortgage is portable?
Although most mortgages are portable before you try and port you need to be 100% sure. Find the last mortgage offer that you would have been sent from your current lender when you last took a mortgage product. On the lender’s offer, there is a section that will show if your existing mortgage is portable when moving home. It will also show early repayment fees.
Should I ever be on a standard variable rate?
When your fixed mortgage rate comes to an end, you will be put on an SVR ‘standard variable rate‘. It rarely makes financial sense for you to be paying the standard variable rate on your mortgage.
Variable rates are often more expensive than most mortgage interest rates offered by your lender. You can quickly change from an SVR to a lower rate which will save you a considerable amount of money. When you become our customer, we make sure you never fall on an SVR by contacting you a few months before your mortgage rate is up for renewal. Our mortgage service is 100% fee FREE!