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Porting a mortgage in the UK is a process that allows homeowners to take their existing mortgage with them when they move to a new property.
In this article we’ll discuss why you might want to port your mortgage, along with some things to consider.
One of the most common reasons why you’d want to consider porting your mortgage is to avoid early repayment charges or exit fees applying to your existing mortgage product.
For example, if you have a mortgage for £300,000 and an early repayment charge of 5%, you can save yourself £15,000 in charges by porting your current mortgage rather than choosing a new mortgage product when you move home.
Another reason that you may consider porting your mortgage is if you’re happy with the terms of your current mortgage.
For example, you may have no early repayment charges or exit fees applicable to your current mortgage, but your interest rate may be much lower than the interest rates available currently elsewhere.
Typically, yes.
However, this will be subject to a full affordability assessment.
It’s also key to note that you may need to arrange a ‘top up’ mortgage, meaning you take out an additional mortgage product for the extra amount required.
If you need to do so, you’d be limited to mortgage products currently available with the same mortgage lender. These might not be very competitive.
This can also cause complications when it comes to remortgaging, as your current and new products may have different expiry dates.
Where you need to take a top up loan, it’s worth looking to see whether you can closely align these expiry dates.
At Rosehill, we take pride in building long-term relationships with our clients. We don’t see ourselves as just a mortgage broker, but rather a trusted partner who will be with you every step of the way.
At Rosehill, we take pride in building long-term relationships with our clients. We don’t see ourselves as just a mortgage broker, but rather a trusted partner who will be with you every step of the way.
If you no longer need to borrow as much, for example if you’re downsizing, you may be able to port a mortgage and pay off a chunk of the mortgage at the same time.
This might not seem like an issue, however it can cause complications.
Most lenders will have a maximum ‘loan to value’ (LTV) applicable to their mortgage products. This means that the loan amount cannot exceed a specified percentage of the property value.
If you’re downsizing, you may find that the mortgage you’re looking to port means you no longer fit within this maximum LTV.
Although you can look at your mortgage documents to find out what this maximum LTV is, it’s worth checking with your broker whether this would apply to the porting application, as there are instances where this would no longer apply.
Not necessarily.
Even if you have early repayment charges applicable to your current mortgage product, there may be more cost effective options elsewhere.
For example, your current interest rate being higher than the options available on the market currently, so you may be able to save money by proceeding with a new mortgage with a lower interest rate
Aside from this, you might now prefer to have a certain feature for your new mortgage that your current mortgage doesn’t offer, for example the option to make use of an offset facility.
We recommend speaking with an experience mortgage broker to discuss your options in more detail – we’d be happy to help of course.
Many lenders in the UK do offer this option, but it is not available with all mortgage products.
You can check your mortgage offer document to check this, or you can contact your mortgage broker.
Even if porting your mortgage is an available option, be aware that this is still subject to full underwriting and a satisfactory mortgage valuation.
If your circumstances have changed and you no longer meet the lender’s criteria, or the new property does not meet the lender’s lending criteria, you may be declined.
To begin the process of porting a mortgage, you can either contact your mortgage broker or mortgage lender.
Once the necessary information and documents are gathered, your mortgage broker can submit an application for you.
The lender will assess your application and instruct a mortgage valuation, similar to a normal application.
It’s common for lenders to require a simultaneous exchange and completion when porting a mortgage.
This means that the transfer of the mortgage to the new property must be completed on the same day as the exchange of contracts.
It’s important in this case that everyone in the process, particularly the solicitors for the buyer and seller, is aware of this and that the both parties are happy to proceed on this basis.
This depends.
If you complete on your sale, redeem your mortgage and pay an early repayment charge, your lender may allow you to reclaim the early repayment charge.
This is usually providing you complete on your new purchase within a certain timeframe from the point you completed on your sale, i.e. for 180 days.
In summary, it is important to carefully consider all of the options available and to speak with a mortgage broker before making a decision.
You can then make an informed decision on whether or not porting your mortgage is the right option for you.
We focus on building long-lasting relationships with clients.
We therefore charge a reduced fee for our existing client remortgages.
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As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments. Think carefully before securing any other debts against your home or property. The Financial Conduct Authority does not regulate commercial buy to lets and some forms of commercial mortgages. You may have to pay an early repayment charge to your existing lender if you re-mortgage
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