Porting your mortgage when moving
Find out if you can – and should – take your mortgage with you
If you've got a mortgage and you're moving home, you must decide whether to take your current mortgage deal with you or get a brand new one – though if you choose the former you'll need to get your lender's approval. This guide explains how 'porting' a mortgage works, whether it's likely to be possible, and what the pros and cons are.
What does 'porting' a mortgage mean?
Many mortgage deals are 'portable'. This means, if you're moving home, you may be able to take your mortgage deal with you to your new property and keep the interest rate.
Yet, even if it is portable in theory, you may be blocked...
That's because your lender will have the final say and there is no guarantee it will actually allow you to port – and even if it does, you could end up borrowing at an uncompetitive rate.
Here's why porting won't necessarily be the best option for you:
You'll have to reapply for your mortgage and may not qualify. In order to 'port' your mortgage, you effectively have to reapply for the deal. And there is no guarantee you will qualify, even though you did when first taking out the mortgage. You may struggle if your situation has changed – you're now self-employed, earn less, have more debt, etc.
Or your lender's criteria might have changed. So even if you fitted its criteria first time around, there's no guarantee that remains the case. And if you haven't made all your mortgage repayments on time, your lender might refuse in the hope you switch provider.
You may not be able to borrow more money. If you move to a more expensive home, any extra cash you need to borrow could be more than your lender is willing to lend you.
If you're able to borrow more, you could end up with two loans. Even if your lender allows you to borrow more in order to move home, it may insist the additional borrowing goes on a separate mortgage deal – likely to have an arrangement fee and a different rate. If you do end up with two separate mortgage deals, be aware it's also likely the deals will revert to your lender's Standard Variable Rate at different times.
You could end up borrowing at a poor rate of interest. If you're able to port and borrow more cash, you'll be limited to the interest rates currently on offer from your existing lender. These may not be particularly competitive compared to today's top mortgage deals, meaning you'll pay a poor rate of interest on the additional borrowing.
I want to port my mortgage. How can I prepare for this?
Before starting the process of selling your home and buying a new one, you can increase the likelihood of your lender allowing you to port by reading our Boost your mortgage chances guide (particularly key if you'd need to borrow more money in order to move).
After that, you'll need to sell your current property. The sooner you get an offer, the sooner you can property hunt in earnest yourself (sellers will take you more seriously with an offer).
Once you've had an offer accepted on a property yourself, you'll be able to provide the new address and details to your lender and apply to port your mortgage.
If your lender isn't willing to let you port – and you're unlikely to be accepted by a new lender for a mortgage – you might have to contemplate staying in your current home.
Quick questions:
Here's an example of how porting your existing mortgage deal while simultaneously borrowing more money from your current lender can work:
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Your existing mortgage deal has two years left to run. The interest rate is 4%.
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Your home is worth £300,000 and your outstanding mortgage balance is £180,000. This means your loan-to-value (LTV) is currently 60%.
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You sell your home for £300,000 and buy a new property for £400,000.
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You're left with £120,000 in sale proceeds from your old home (£300,000 minus the £180,000 of outstanding mortgage). You've also got £20,000 in savings that you plan to put towards buying the new property.
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After adding up the £120,000 and the £20,000 – making £140,000 – this leaves you needing a mortgage of £260,000 to afford the new property.
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Your lender agrees to port your current mortgage deal to the new home, meaning you'll still pay 4% on the original £180,000 of mortgage (until that mortgage deal ends). This leaves you needing to borrow an extra £80,000 from your lender.
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This extra borrowing pushes your LTV up to 65% from 60%, where the best interest rate from your existing lender is 4.5%. So while you'll continue paying 4% on £180,000 of your mortgage, you'll pay 4.5% on the additional £80,000 – and have two mortgage deals running simultaneously.
If you want to move to a new property that's cheaper than your current home you might be able to take your existing mortgage deal and rate with you.
However, if you don't need to borrow as much, you face paying an early repayment charge (ERC) on the amount of the mortgage not ported to your new home.
For example, if you've got a £200,000 mortgage and move to a cheaper home where you only need a £150,000 mortgage, you might have to pay an ERC on the £50,000 not taken with you – which could set you back £100s or even £1,000s.
Where you'd need to pay an ERC, it might make more sense to get a new mortgage from a different lender entirely. Your existing lender might not let you port anyway.
In this types of scenario it's best to seek the advice of a mortgage broker.
Example: porting a mortgage and borrowing more money
Can I port my mortgage to a CHEAPER property?
I can't port – can I switch to a new mortgage?
If you can't port and still want to move, you could ditch your existing mortgage deal and take out a new one entirely, either from your current lender or a different one.
However, there are potentially huge costs to dumping a mortgage deal early in order to take out a new one...
Full details in our How much will remortgaging cost guide, but in brief you need to weigh up whether it's worth paying the following fees in order to get a new deal – if it's not, the reality is you face being stuck in your current home for now.
- Early repayment charge
You will almost certainly have to pay an early repayment charges (ERC) to exit your current deal if it's not finished yet – for example, you're only two years through a five-year fix.
ERCs are usually between 1% and 5% of the outstanding mortgage, depending on how early you leave the deal. On a £200,000 mortgage, an ERC could easily cost you £1,000s.
If your mortgage deal has come to an end and you've been moved on to your lender's Standard Variable Rate, there is unlikely to be an ERC to switch deals (but do check).
- Mortgage exit fee
When you pay off a mortgage (including when remortgaging to a new lender – as the new lender pays off the debt on the old deal) you're normally charged an exit fee, which is typically a few hundred pounds. Sometimes called a deeds release fee or final fee, you may have already paid it upfront when taking out the mortgage deal, so do check.
- Fees for the new mortgage deal
To take out the new mortgage deal, you'll likely need to pay an arrangement fee as well as a valuation fee too, so make sure you factor these into your cost calculations.
Our Ditch your fix calculator can help you decide if dumping a mortgage early is worth it.
I can port, but other deals are cheaper. What to do?
You'll need to look at the maths, and see if it adds up for you. Many borrowers find that even though they can port their mortgage, the rates on offer aren't that attractive.
If that's the case, it's worth seeing if it makes financial sense to pay the penalty to leave your mortgage deal early and take out a new mortgage instead...
Consider how long you've got left on your current mortgage deal
If there are a few years left on your mortgage deal, you are more likely to want to stick with your current deal and simply port it than where the deal has just got a few months to run. This is because the earlier you leave a deal, the heftier the penalty fees you'll pay.
Having said that, if there is a long time left to run on an expensive deal then, even with the fees to switch early, it may be wise to leave – do the maths first.
To work out the cheapest option, you need to compare the cost of keeping your current deal with the cost of ditching it and taking a new deal. Make sure to include the cost of any fees for exiting your current deal and starting a new one in your calculations.
To help with the calculations, use our Should I ditch my fix? calculator. And if you need help finding a good mortgage deal in the first place, see our Cheap mortgage finding guide.
Will my lender say yes to porting?
Whichever option you choose – porting or applying for a new mortgage elsewhere – you will need to be accepted by the lender. This requires you passing several tests.
Our Boost your mortgage chances guide can help here, but in brief this is what lenders will look to establish:
Does the lender think you can afford the repayments? Lenders are required to carefully check you can afford the mortgage repayments. You will face close scrutiny of your finances and will need to provide evidence of your income. Just because you got a mortgage last time, this doesn't necessarily mean you'll be successful again.
You may even find that the lender is not willing to let you borrow as much this time around. In this scenario, if you're not increasing your debt and you've made all your repayments on time, the lender can waive some affordability rules, but it doesn't have to.
Your age. Many lenders have upper age limits when it comes to new borrowing. Some lenders even consider what age you'll be when you finish repaying the mortgage. This isn't to say you can't port if you're nearing retirement, but it's likely to play a role.
Is your credit report up to scratch? Your lender will also want to check your credit report to see how you have handled debt over the past few years. This will include a search of your credit file to see whether you have missed payments on any of your bills.
Is the property suitable? Lenders are picky about the types of properties they'll lend on. Some won't lend on homes over a shop or in a high rise, for example.
A mortgage broker can advise you about which lender is most likely to accept you based on your circumstances, including income, credit score and type of property.
See our Cheap mortgage finding guide for more information about mortgage brokers.
Looking for more mortgage help?
We've got lots of other helpful guides:
Remortgage guide. How the remortgage process works.
Cheap mortgage finding. How to find the top deal for you.
Mortgage best buys. See today's top mortgage deals.
Should you remortgage? Pros and cons of remortgaging.
Mortgage prisoners. Are you one of 100,000s trapped?
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