porting a mortgage

Porting your mortgage

Find out if you can – and should – take your mortgage with you

If you're moving home you face the question of whether to take your existing mortgage with you or get a brand new deal – but the choice may not always be yours. This guide explains the process of porting a mortgage, whether you're likely to be able to do it and if it's the right option for you.

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What does porting a mortgage mean?

how porting a mortgage works

Many mortgages are 'portable', which means you may be able to transfer your current mortgage product to a new property.

Even if your mortgage is portable in theory though, you may still be blocked.

Porting is a great flexible feature but there are no guarantees your lender will actually permit you to to do it – and you could end up borrowing at an uncompetitive rate to boot. Here's why porting might not work out or be the best option for you:

  • You have to reapply for your mortgage and may not qualify. When you ask your lender to 'port' your mortgage, you in effect have to reapply for that deal. Unfortunately, there's no guarantee that you'll qualify even though you did the first time you took out the mortgage. You may struggle if circumstances have changed, eg, you're now self-employed, you earn less or you have more debt and/or outgoings.

    Or you might not have changed at all but your lender's criteria has, so even though you got your first mortgage without hassle, it doesn't mean the same will happen again. And if you haven't made all your mortgage payments on time, chances are the lender will refuse in the hope you leave them.

  • You may not be able to borrow more. If you move to a more expensive property, you may need to borrow more cash, but your lender may not allow this if you are already close to the maximum it will lend you.

  • If you do borrow more, you could end up with two loans. If you move to a more expensive property, as many people do if they're looking for a bigger home, you may need to borrow additional cash. If it is willing to lend, the lender may insist that the additional borrowing goes on another mortgage product, which is likely to involve an arrangement fee and possible a higher rate.

    If you do end up on two mortgage products and their initial periods finish on different dates, be aware you may revert to a high rate on the one that ends the earliest.

  • You could end up borrowing at a poor rate of interest. If you can port and are able to borrow more, remember that you're tied to one lender so you'll have little choice other than to choose from the rates on offer to you. These may not be particularly competitive and could be far from the cheapest best buys available, leaving you stuck paying a higher rate of interest.

How can I prepare for porting my mortgage? 

Before you commit to selling your property and buying a new one, you should do your checks to see if you are likely to qualify to port your existing deal or get a new mortgage.

If your checks prove you'll be able to port your mortgage, you'll need to start the ball rolling in terms of selling your current property, as otherwise prospective sellers won't take you seriously.

Until you are able to provide the new property address and details, you won't get a definite mortgage offer so be very wary of contractually committing to anything before then.

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I can't port – can I switch to a new mortgage?

You can leave your existing mortgage, but you'll potentially face huge fines running into thousands of pounds if you do.

If you can't afford these fees to stick, the reality is you face being stuck in your current home. See our How Much Will Remortgaging Cost guide for more on the fees you're likely to face if you want to ditch your mortgage, but in brief these will be:

Early repayment charge

If you're still within your introductory offer period (eg, part way through a two-year fix) you will almost certainly have early repayment charges to pay.

These are usually 1-5% of the outstanding debt, depending on how long you have left of your intro deal. On a £200,000 outstanding debt for example, the early repayment charge will likely between £2,000 and £10,000. 

If your introductory deal is over, there are unlikely to be any early repayment charges but do check.

Exit fee

When you pay off a mortgage (including when you remortgage to a new lender – as the new provider pays off the debt on the old deal) you normally pay an exit fee, which is usually a few hundred pounds. It might be called a deeds release fee or a final fee, but you may have already paid it upfront when you took out the mortgage, so do check.

Charges for a new home loan

Once you've exited your old deal, you'll likely need to pay an arrangement fee and valuation fee for your new mortgage, so make sure you factor these in too.

I can port, but other deals look cheaper – what should I do?

what fees will you pay to port your loan

The key to this will be to look at the maths, and see if it adds up for you. Many borrowers will find that even though they can port their mortgage, the rates on offer won't be that attractive.

If that's the case, it'll be worth seeing if it makes financial sense to pay the penalty for leaving your existing home loan and taking out a brand new mortgage elsewhere.

Consider how long you've got left on your current deal

If you have a few years left on a cheap deal, you are more likely to want to stick with your current mortgage than, say, if you only have a few months to go. This is because the earlier you leave a deal, the heftier the fees (as discussed in the previous chapter). Of course, if you've a long time left on a particularly pricey deal then, even with the fees to switch early, it may be wise to leave – do the maths first.

To find the cheapest option, you need to work out the cost of keeping your current deal and compare it to the cost of ditching and taking a new deal. Make sure you've included the cost of any fees for exiting your current deal and starting a new one – including arrangement fees – in your calculations.

One way you can compare mortgages is to use our 'Should I ditch my fix?' calculator. If you need help finding a good mortgage in the first place, see our Cheap Mortgage Finding guide.

My mind is made up. What's next?

Whichever option you choose, you will need to go through a new mortgage application. That means you'll have to pass a number of tests – see our Boost Your Mortgage Chances guide for tips on how to increase your prospect of passing these. 

Here's what lenders will look at when you apply for a mortgage:

  • Does the lender think you can afford the repayments? It's been far tougher to get a mortgage since 2014 as lenders are required to carefully check you can afford the mortgage repayments – something that the onset of coronavirus has made even tougher for some.

    You will face closer scrutiny of your finances and you will have to provide evidence of your income. Just because you got your previous mortgage, this doesn't mean you'll be successful again.

    Say you borrowed £200,000, which was the maximum you could get a few years ago, you might find that lenders are not willing to offer as much this time around, In that scenario, if you're not increasing your debt and you've made all your payments on time, the lender does have the option to waive some of the new affordability rules, but it doesn't have to.

  • Is your credit report up to scratch? Your lender will also want to check your credit rating and 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. See our Credit Scores guide for the big things to look out for.

  • Is the property suitable? Lenders can also be quite picky about the types of properties they're willing to lend on. Some banks and building societies won't lend on places over a shop or in a high rise, for example.

A good broker can advise you on which lender is most likely to accept you based on your circumstances, whether that be your income, credit score or type of property. Have a read of our Cheap Mortgage Finding guide for information on how to speak to a broker.

I can't port my mortgage OR get a new mortgage deal

According to the Financial Conduct Authority, there are around 250,000 so-called mortgage holders trapped in their current mortgage deal. If you can't move away from your existing mortgage deal, then it's likely that you are one of these 'mortgage prisoners'.

For mortgage prisoners, stricter affordability tests have made it difficult to switch to new mortgage deals, even though these are CHEAPER than prisoners' current rates. But, in part due to MSE campaigning, the FCA has called for a relaxing of mortgage affordability tests – hopefully throwing a lifeline for mortgage prisoners. For more on these latest developments, see our MSE news story.

For more advice if you're in this situation, seek a mortgage broker. Also see our Boost Your Mortgage Chances guide to help you get back on your feet as quickly as possible.

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