Porting A Mortgage

If you’re looking to move home but would prefer to keep your current mortgage deal rather than apply for a new one, porting might be the solution you’re looking for. 

Read on to learn all about porting a mortgage and whether this is the right option for you.

What does porting a mortgage mean?

Porting a mortgage is where you transfer your existing mortgage deal, including the interest rate and the term it applies for, from the property you’re selling to the one you’re buying without paying any early repayment charges (ERCs) or arrangement fees. 

Mortgage porting can be particularly beneficial if, like everyone, you’re keen on moving home with minimal fuss. Bringing your existing mortgage deal with you rather than having to find a new one by remortgaging should save you a lot of time, stress, and, possibly, some money, too. 

Are all mortgages portable?

The vast majority of mortgages are portable, but you should check with your lender to make absolutely sure. Porting might not be available for certain specialist home loans, such as buy-to-let or shared ownership mortgages.

Even if, as is likely, your current mortgage deal is portable, it’s important to bear in mind that the mortgage loan is not automatically transferred, and you will need to re-apply with your lender to borrow the same amount. 

How does mortgage porting work?

Mortgage porting only applies to the terms and conditions of your current mortgage deal, not the actual loan amount. If you want to take advantage of porting your mortgage, you will need to submit a new application with your current mortgage lender. 

Your mortgage lender will then review your application to determine whether you still fit within their borrowing criteria. This includes:

• I am conducting an affordability assessment.

• Reviewing your credit history

• Reviewing your income and outgoings

• Valuation of your new property

If there’s been any change to your personal or financial circumstances since you initially took out your mortgage, which now puts you outside the mortgage lender’s lending criteria, they can reject your application. 

For example, if your credit score is now much lower than it was due to a bad credit issue registered on your Credit Report or you’ve only recently changed your employment status from employed to self-employed, this could potentially affect your chances of being approved. 

It could also be the case that the property you want to buy - say, if it’s not a standard construction, such as a high-rise apartment, is timber-framed or a conversion of some kind - could also mean your mortgage lender cannot provide the borrowing you need as not every lender accepts all types of properties. 

Can you borrow more money when porting a mortgage?

Yes, it’s possible. If you need to borrow more to buy your new property, with mortgage porting, you’d still be tied to your existing lender, who does not have to offer the same interest rate terms as your current mortgage deal for any further borrowing that’s required. 

In most cases, the additional borrowing is arranged as a separate mortgage deal, meaning you’ll have two repayments, with different interest rates, to cover the amount you need. The new mortgage deal may also include an arrangement fee. 

When is porting a mortgage a good idea?

Mortgage porting is certainly worth considering if your current mortgage deal has a competitive interest rate and would incur a hefty early repayment charge (ERC) simply by moving house. 

Porting a mortgage has benefits and potential drawbacks, which should be taken into account before proceeding. 

Benefits

• Keeping all the same terms and conditions for a competitive mortgage deal

• Avoid paying any early repayment charges (ERCs) or arrangement fees on your current mortgage deal when you move house

• The application process should be more straightforward as you’re staying with your existing mortgage lender

• You can apply for additional borrowing or reduce the amount you now need, depending on the value of the new property you want to buy

Drawbacks

• There are no guarantees you’ll be approved for the mortgage loan

• Could prevent you from finding more competitive rates through remortgaging

• Your existing lender could reject any request for additional borrowing

• The interest rate for your additional loan could be less competitive, cancelling out any advantage you’ve gained through porting your original mortgage

What are the alternatives if porting a mortgage isn’t available?

Before making any final decisions on porting your mortgage, weighing up the alternatives is essential so you can make a more informed choice. The main options you have are: 

• Remortgaging. If your existing mortgage deal doesn’t have long to run before it expires, it's highly recommended that you speak with an experienced mortgage broker to see what remortgaging deals are available so you’re sure the terms you have are the most competitive available for your circumstances. 

• Product Transfer. Your existing lender might have other competitive mortgage deals available, allowing you to transfer your existing loan and any additional borrowing you need without incurring any hefty fees. 

For either of the above alternatives, even if charges are still applicable, it may work out cheaper overall to switch to a new mortgage deal when you move rather than porting your current home loan if the interest rate is lower and there are minimal or no entry fees. 

Borrowing more money through remortgaging or a product transfer would also have the added benefit of allowing you to have one mortgage with one repayment rather than two if your lending is approved.