Porting a mortgage explained: how to move home without starting over

Did you know moving house doesn’t necessarily mean starting again when it comes to your mortgage product? This is called porting a mortgage, and it’s an option that is being increasingly explored by home movers. Read on to discover how the porting process works and whether it is right for your circumstances.

Got a mortgage rate you’re desperate to keep?

You’re not alone! While mortgage rates are showing positive signs of recovery, with the recent Bank Rate reduction to 4%, there are many people looking to cling onto their favoured products, even after moving home.

Porting a mortgage helps you to do just that, with the process transferring your existing mortgage deal to a new property when you move home. This means that rather than paying off your old loan and arranging a completely new one, you keep the same interest rate, terms and conditions if your lender agrees.

As well as helping you keep a favourable fixed rate deal, porting a mortgage often helps you avoid early repayment charges, which can save you a lot of money when moving home. Porting a mortgage isn’t always straightforward however, neither is it suitable for every home mover.

Want to borrow more?

For property buyers moving onto bigger and better things, chances are you’re going to need a larger mortgage. You may think it would be simpler to get a new mortgage in these circumstances but porting is still an option for those looking to borrow more. We’ll let Nationwide explain how it works:

“If you need to borrow more than the amount on your existing mortgage, you can port your existing mortgage product to all or part of the mortgage balance. But, for the outstanding amount, the ported interest rate doesn’t apply. You will need to choose a new mortgage product or deal to cover it. The equity from your existing property can go towards the new mortgage loan amount. You don’t have to pay an ERC with additional borrowing.”

By topping up your loan and arranging an additional mortgage alongside your ported one, you’ll essentially have two separate sub-accounts with varying rates and end dates. While this may give you access to extra funds, the blended cost of your mortgages could be higher than a brand new deal. Repayments may also be particularly complicated.

Need to borrow less?

If you’re at the other end of the scale, and are downsizing with your next property purchase, you’ll need a smaller mortgage to proceed, which unfortunately brings its own complications.

Again, the porting process is possible, yet paying off part of the balance could trigger early repayment charges if you are still within your fixed or discounted period. Whether these charges are waived or reduced is entirely up to your lender. For most, taking out a new mortgage deal and giving porting a miss is recommended in these circumstances.

Borrowing the same amount?

When porting a mortgage, the ideal scenario and the smoothest results can be found when you’re borrowing the same amount as your existing mortgage. You’ll still need to pass the relevant affordability checks to be successful however. Borrowing the same amount and porting means you’ll enjoy your current interest rate long after the big move and avoid early repayment penalties in the process.

Thinking of porting your mortgage?

As the scenarios above demonstrate, porting a mortgage isn’t always the best option. Our independent mortgage specialists will get to know your circumstances to ensure porting is the right next step for you. And if it isn’t, we’ll help you find the best mortgage deal for your requirements. So, what are you waiting for? Get started today!