You usually can move house during your fixed-rate period providing you can afford any fees involved. But whether you should or not, and if you do, whether you should move your existing mortgage or take out a new one, are different questions. If you can wait until your fixed-rate period is over, that’s generally more cost-effective, but if you need to move before your fixed-rate period ends then this article will help you understand your options and potentially save you a lot of money.
Porting Your Current Fixed-rate Mortgage
One option is to move your current mortgage to your new property, known as ‘porting’. Not all lenders allow this, however, so you’ll need to check your contract.
The benefit of doing this is that you shouldn’t have to pay an early repayment fee as you are not ending your contract. However, porting your mortgage isn’t always straightforward, and there are some downsides to consider which we’ll briefly outline below.
- You may not qualify this time around. When porting your mortgage, you are essentially reapplying for the same deal. Therefore, if your circumstances have changed or if your lender has updated their criteria, you may not be accepted this time around.
- You may have trouble borrowing more. If you’re already near your borrowing limit your current lender may refuse to increase your loan. If they do allow you to borrow more, they’ll usually ask you to take out a separate mortgage for the additional funds, with extra fees and a higher interest rate. One of your loans will likely move onto the higher variable rate for a period before you can remortgage, leading to even more cost down the line.
- You may have to pay a higher interest rate. Porting your mortgage means you are committing to your current lender. If you shop around you’ll likely find much better rates elsewhere, so by porting your mortgage you could end up paying more interest than you need to.
Porting your mortgage can be a good option if you are moving to a property of a similar value, but only once you’ve found out what other lenders are willing to offer you, as you may be able to save money with a lower rate. If you are looking to borrow more, then we strongly suggest you look elsewhere, as you could save thousands with a new lender in the long term. Pop in and have a free chat with one of our expert advisors, we’ll find out what deals are available to you from other lenders and help you work out the most cost-effective way forward.
Taking Out a New Fixed-rate Mortgage
As touched on above, whether you’re able to port your mortgage or not, you may be better off taking out a new fixed-rate mortgage with a different lender. It’s important to understand that when doing this you will need to pay off your current mortgage early (usually using your new mortgage) and therefore an early-repayment fee may be applied. This fee is usually a percentage of your remaining loan, and for most contracts, the closer you are to the end of your fixed-rate period the lower the percentage will be. You may also have to pay an exit fee, but your new lender will often cover this for you.
There may be other fees involved with taking out a new mortgage, but even so, this is often more cost-effective than porting your current deal. Other lenders will likely offer you a far more competitive rate, potentially saving you thousands over the coming years. And with the help of a mortgage broker, switching to a new lender is very easy.
Finding the right way forward all comes down to doing the research and maths. An impartial mortgage broker understands the criteria of each lender, and they’ll be able to find out what deals are available to you. They’ll then compare the costs of you leaving your current mortgage with how much you’ll save on the new deal.
The Bottom Line
If you can wait until your fixed-rate period is over before moving then that’s usually the most cost-effective solution. But if you need to move sooner then providing you can afford any fees you should be able to. You’ll generally have two options, either port your existing mortgage or take out a new deal with a different lender. Even if you are able to port your mortgage, you may be able to save thousands by switching to a new provider, and with our help it’s very easy to do.
We’re impartial mortgage advisors and we understand the criteria of each lender. This means we can find you a great deal that suits your needs perfectly, and then help you work out whether you’ll be able to save money by switching. We offer a free consultation, so you have nothing to lose. If we can save you money by finding a better deal, then we’ll be happy to get it sorted for you quickly and easily. We look forward to helping you!
