By Matthew Horan CeMAP · Mortgages
Quick answer: Porting means taking your existing mortgage deal with you when you move home. It can help you avoid an early repayment charge and keep a rate you're happy with, but it isn't automatic. You'll still need to be approved for the new property, and if you need to borrow more, the extra amount is usually on a different rate. Sometimes a brand new mortgage works out better. A whole-of-market broker can compare both. Clarity Mortgages & Protection in Altrincham gives fee-free advice, with no obligation.
If you're planning to move and you're in the middle of a fixed or discounted deal, you've got a decision to make. Do you take the mortgage with you, or leave it and start again?
The right answer depends on your rate, your charges and how much you need to borrow. Here's how to think it through.
What does porting a mortgage mean?
Many mortgages are "portable", which means you can transfer the deal to a new property rather than ending it. You sell your home, buy a new one and move the mortgage across, usually keeping the same interest rate for the remainder of the term.
The key point is that porting isn't a right. It's a new application, and the lender will assess you again. They'll look at your income, outgoings and the new property, just as they would for any mortgage.
Why you might port
You have a good rate. If your current deal is competitive, keeping it can be attractive.
You'd avoid an early repayment charge. Leaving a fixed deal early often means a charge. Porting can avoid it, as the deal continues.
You want a smoother process. Staying with your current lender can sometimes mean fewer new fees, though this varies.
Things to watch out for
You have to be approved again. Your circumstances may have changed since you took out the mortgage.
The new property must meet the lender's criteria. Different types of property, such as flats, new builds or unusual construction, can be assessed differently.
Timing can be tight. Lenders usually set a deadline, often by which you must complete the purchase after the sale. If you miss it, you may face the early repayment charge. Check your terms.
Borrowing more is on a different rate. If you need a larger mortgage, the extra amount is usually at the lender's current rate, which may be higher. You'll end up with two parts to your mortgage, each with its own rate and end date. The overall cost is a blend.
Borrowing less can complicate things. Some lenders have rules on part-porting.
Your deal might not be portable. Check your mortgage offer or paperwork.
Port or take a new mortgage?
It's not always obvious. Here are the questions that help decide:
What's your current rate compared with what's available now? If rates have fallen, a new deal could be cheaper even after charges. If they've risen, your existing rate could be a bargain.
How much is the early repayment charge? Compare it with the savings you might make by switching.
How much more do you need to borrow? A large top-up at a higher rate can change the picture.
How long is left on your deal? If it ends soon, the question may be less important.
Are there fees either way? Product fees, valuation fees and legal costs can all play a part.
We work through the numbers with you, so you can see the total cost of each route, not just the monthly payment.
Don't forget the other things that change when you move
Your protection. If your mortgage amount or term changes, your life insurance and other cover may no longer match. See Re-mortgaging? Check your life insurance still fits your new mortgage. The same applies when you move.
How much you can borrow. Lenders reassess affordability. Our post on how much you can borrow explains what they look at.
Your next deal. If your current deal is about to end, you could also read Your fixed rate is ending: what Altrincham homeowners should do next and When should you re-mortgage?
Home improvements. If you're planning work on your new home, see Re-mortgaging for home improvements for ways to fund it.
How a whole-of-market broker can help
A broker can compare porting against taking a new mortgage, check what your current lender will allow and look across other lenders for alternatives. We can also manage the timing between the sale and the purchase, which is often where problems arise. Nothing is guaranteed, as each lender makes its own decision.
Frequently asked questions
Can I port my mortgage?
Many mortgages are portable, but you'll need to be approved for the new property and borrowing, and your lender's terms apply. Check your mortgage paperwork or ask us.
Will I have to pay an early repayment charge if I port?
Usually not, if you port within the lender's rules and timescale. If you don't complete the new purchase in time, a charge may apply.
What happens if I need to borrow more?
The extra amount is usually on a separate rate, so you may have two parts with different rates and end dates.
What if I'm borrowing less on my new home?
Some lenders allow you to port a smaller amount, though rules vary. The remainder may be subject to an early repayment charge.
Is it better to port or take a new mortgage?
It depends on your current rate, the charges and how much you're borrowing. We'll compare both so you can see the difference.
Does it cost anything to speak to you?
No. We don't charge a fee for our advice.
If you're planning a move and aren't sure what to do with your mortgage, get in touch. It's fee-free with no obligation. We help clients across Altrincham, Trafford and Cheshire.
About the author
Matthew Horan CeMAP is Principal of Clarity Mortgages and Protection, an independent, fee-free mortgage and protection broker based in Altrincham. He has over 10 years' experience helping individuals, families and business owners with mortgages and protection, and writes in plain English because most people aren't given the chance to understand what they're signing.
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.
This article is general information, not advice. What's right for you depends on your own circumstances. Acceptance of an application depends on the lender's criteria and is not guaranteed. Check your own mortgage terms for details of any early repayment charges and porting rules.
