If you’re about to move house, you may be wondering whether you should take your current mortgage with you or look for a new deal elsewhere. Moving your current mortgage to a new home is called ‘porting’ because these mortgages are ‘portable’ – but not all mortgages come with this option, so check your contract to see if it’s available to you. Even if you are able to port your mortgage, it’s not always straight forward and it can lead to you paying more than you would with a new lender. In this guide, we’ll explain everything you need to know so you can make the most cost-effective decision.
Things to Know Before Porting Your Mortgage
Porting your mortgage isn’t always the best choice. Let’s have a look at the three main considerations you need to bear in mind before deciding to port your mortgage.
You may not qualify this time around
Even if you’re able to port your mortgage, this doesn’t mean you can simply call your lender and tell them to make the switch. You essentially have to reapply for the same deal, and therefore you may not be accepted this time around. This makes sense because your circumstances may have changed and your lender needs to be sure you can still afford the repayments. Also, your lender’s criteria might have changed, which could mean you no longer qualify for the deal. Mortgage brokers are up to date with all lenders’ criteria, and they should be able to determine whether or not your current provider will accept your request. They can also advise you on other lenders who may be able to offer you a better deal.
You may have trouble borrowing more
It’s likely you’ll need to borrow more when moving to a new home. You may already be close to your limit with your current lender, in which case you’ll need to look elsewhere. If your provider is willing to lend you more, they’ll often ask you to take out a separate mortgage product for the extra funds, which could incur more fees and a higher interest rate. It can also mean that one of the loans will go onto the higher default rate whilst you wait for the second one to catch up. This can lead to you paying a large amount of interest on one of the loans before you can remortgage.
You may have to pay a higher interest rate.
Whether you borrow more or not, if you port your mortgage you are committing to your current lender only, which doesn’t give them an incentive to offer you a competitive rate. If you speak to a mortgage advisor and see what other options are available to you, you’ll likely find a much better rate elsewhere, potentially saving you thousands over the coming years.
What Should I Do if I Can’t Port My Mortgage?
If you’re not allowed to move your mortgage to a new property, then be sure to speak to a whole of market mortgage advisor who’ll help you find a new deal. You may have to pay an early repayment fee if you’re still in your fixed period, or an exit fee to pay off your loan, but your new provider might cover the exit fee for you and you could end up with a better interest rate as well. So don’t worry if you can’t port your mortgage – book a free consultation with one of our experts and we’ll help you find a deal that suits your needs perfectly.
If I Can Port My Mortgage, is it Always the Right Thing to Do?
Although porting your mortgage may seem like the simpler option, you’ll still have to reapply for your current deal. So this is a great time to shop around and see what products are available to you elsewhere, as you’ll often find much more competitive rates with other lenders. It’s important to use a whole of market mortgage advisor to do this because they have access to all mortgage products and they understand the criteria of each lender. Without this advice, you won’t know which deals you’re likely to be accepted for.
Then it’s just a case of doing some maths. Our advisors will help you work out how much it’ll cost you to leave your current deal versus how much you’ll save by switching to a better rate. If it’s going to cost you more to switch, then we’ll advise you to stick with your current lender, but if we see that you could save by switching then we’ll help you do that easily and smoothly. Sometimes you can save thousands of pounds by switching to a new deal, so it’s well worth booking your free consultation and finding out what options are available to you.
The Bottom Line
You can move your current mortgage to a new home if your lender allows it. However, you’ll still have to reapply and pass affordability checks and credit checks, and your current lender will also need to value and assess the new property. If you need to borrow more, you may have to take out a separate mortgage which can mean more fees and a period of higher interest on the default rate before you can remortgage.
The great news is, you now have a perfect opportunity to shop around and see what other deals are available to you. Doing this can save you thousands as you’ll likely find a better rate elsewhere. Book your FREE consultation and we’ll try and find you a better rate with a new lender. We’ll then help you work out the most cost-efficient way forward based on how much it’ll cost you to leave your current mortgage versus how much you’ll save with a better deal. You’ve got nothing to lose and potentially a lot to gain, so come and chat to us for free and let’s get you moving in the right direction. We look forward to helping you!
