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.
What does porting a mortgage mean?
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, for example, 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 possibly a higher rate.
If you do end up on two mortgage products and their initial periods finish on different dates, be aware they will revert to your lender's standard variable rate (SVR) at different times .
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 from that particular lender. These may not be especially 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 committing to sell your property and buy a new one, you can increase the likelihood of your mortgage lender allowing you to port by carefully reading through our Boost your mortgage chances guide (particularly important if you think you'll need to borrow more money on top of your current mortgage).
After this, you'll need to start the process of selling your current property. The sooner you get an offer, the sooner you can start property hunting in earnest yourself (sellers are less likely to accept your offer if you've not agreed a sale on your own home).
Once you've had an offer accepted, and you're able to provide the new property address and details, you'll be able to 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 the same lender can work...
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Your current property is worth £300,000 and your outstanding mortgage is £180,000, so your loan-to-value (LTV) is 60%. The interest rate on your existing mortgage deal – which still has two years left to run – is 4%.
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You want to move home, so you sell your current property for £300,000 and have an offer accepted on a new £400,000 property.
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You're left with £120,000 in proceeds from the sale of your current property (£300,000 minus the £180,000 of outstanding mortgage). You've got an extra £20,000 in savings which you plan to put towards buying the new property.
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So, after adding up the £120,000 in sales proceeds and the £20,000 in savings, making £140,000, this means you'd need to borrow £260,000 to afford the new property.
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Your lender agrees to port your existing mortgage deal to the new property, meaning you'll still be paying 4% on the original £180,000 of borrowing (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 from 60% to 65%, where the best interest rate from your existing lender is 4.5%. So, as a result, while you'll be paying 4% on the first £180,000 of your mortgage, you'll pay 4.5% on the remaining £80,000 of your mortgage – 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 with you (port, in other words).
But if you don't need to borrow as much money on your mortgage as a result then you might face paying an early repayment charge on the amount of borrowing you don't port to your new home.
For example, if you've got a £200,000 mortgage on a £250,000 property and move to a £200,000 home, meaning you only need a £150,000 mortgage, you might have to pay an ERC on the £50,000 you're not taking with you – something that could set you back £100s or even £1,000s.
Where you need to pay an ERC in order to port it might make more financial sense to get a new mortgage from a different lender entirely. In fact, if you don't need to borrow as much money your existing lender might not let you port anyway.
In these types of scenario it's best to speak with a mortgage broker as they'll be able to advise on the different courses of action.
How does porting a mortgage while simultaneously borrowing more money work?
What if I want to port my mortgage to a cheaper property?
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 (for example, part way through a two-year fix) you will almost certainly have early repayment charges to pay.
These are usually 1 to 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?
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.
Will my lender say yes to porting?
Whichever option you choose – porting or applying for a new mortgage elsewhere – 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 helpful hints).
Here's what lenders will look at when you apply for a mortgage:
Does the lender think you can afford the repayments? It can be tough to get a mortgage as lenders are required to carefully check you can afford the mortgage repayments – something not made any easier by the cost-of-living crisis.
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, 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 affordability rules, but it doesn't have to.
Your age. Many lenders have upper age limits, typically 75, when it comes to new borrowing. Some lenders might even consider what age you'll be when you finish repaying the mortgage. This isn't to say you won't be able to port if you're nearing retirement, but it's likely to be a factor in the lender's decision.
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.
We've got lots of other helpful guides:
Remortgage Guide. Free guide which has tips on when remortgaging’s right, plus how to grab top deals.
Cheap mortgage finding. How to find the top deal for you.
Mortgage best buys. Find your top mortgage deals.
Should you remortgage? What to ask yourself before remortgaging.
Mortgage prisoners. 100,000s unfairly trapped but there's help for some.
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