Porting a mortgage

What is porting a mortgage? 

When you port a mortgage, you are essentially asking your current lender to let you move your existing mortgage product to a new property. You take the interest rate, the remaining term, and the conditions of your current deal with you.

While porting a mortgage can be easier to arrange, you won't escape the full application process. Your lender will still need to be satisfied that you can afford your mortgage repayments and that the new property is suitable security.

How does porting a mortgage work? 

While it might seem simpler because you're staying with the same lender, the process is very similar to a new mortgage application. Here's how it works:

• Confirm if your mortgage is 'portable'. This will be stated in your original mortgage offer.

• Tell your lender you're moving and wish to port your mortgage.

• Provide up-to-date information (such as proof of income and details of your outgoings). The lender will then assess your affordability based on their current criteria, not the criteria in place when you first took out a mortgage.

• Your lender will carry out a valuation on the new property. This reassures the lender that the property is worth what you're paying for it.

• Your lender will process any changes to your loan amount if you are upsizing or downsizing.

• If you pass all checks, including a full credit check, your lender will approve your application. The funds will then be handled by your solicitors, just like they were when you first bought your home.

Can I borrow more when porting?

Many people move to a new property because they need more space, so it’s likely that your new home will be more expensive than your existing one. This means that when you port your mortgage you’ll need to increase the size of your loan.

It is possible to increase your loan if you’re porting your mortgage to a more expensive property by using the equity in your existing home to cover the difference. However, not all lenders will allow you to borrow more when you port. 

Even if your lender does offer this option, you’ll still need to meet their criteria for the additional borrowing. In some cases, your lender will keep your original mortgage amount on its existing rate and provide the extra funds as a separate mortgage product. This means you will have two separate mortgages with the same lender, likely with different rates and end dates, which can complicate future remortgaging (and potentially make this more expensive, as you may have to switch each deal separately, incurring double the fees).

All this said, it may still possible to port your mortgage if you're moving to a cheaper property. If your LTV has grown, then the lender may allow you to port if you repay some of the mortgage balance to reduce the LTV. Equally, you could opt to pay any ERCs and still go ahead with the porting. However, at this point, it’s important to assess whether this would cost you more than simply remortgaging with another lender. 

Why might a mortgage porting application be rejected?

Portable mortgages are often misunderstood as being simpler to qualify for because you've qualified for the mortgage in the past. In reality, when you port your mortgage you are making a new application.

You'll need to meet your lender's approval for the loan in your current circumstances. It’s actually fairly common to be declined when you port your mortgage, especially as property values and interest rates have both risen in recent years.

Some of the most common reasons that porting may not be possible are: 

• Your financial circumstanceshave changed. Lower income, higher debt levels, or increased daily living costs can mean you no longer pass your lender's current affordability tests.

• Your employment status has changed. Going from full time to part time employment, or from employed to self-employed work, can make lenders more cautious.

• Your credit score has gone down. You will undergo credit checks as you are taking out a new loan, so any negative changes to your file will be considered.

• The new property does not meet lender criteria. If you’re moving to a property that your lender considers ‘non-standard’ then they may be less keen to lend.

• The lender’s valuation of your new property is too low. This might mean that they won’t lend you enough money to buy it.

Should I remortgage to a new lender when I move house?

Whether or not porting is the right choice for you will depend on a wide number of factors, from your personal circumstances to the type and value of your new property. It’s a good idea to look at any fees involved with porting, such as those that may be applicable to increasing or decreasing your loan size.

The interest rates on your current mortgage are also an important factor to consider, as unless your existing rate is much more competitive than others available on the market, you may be able to save more by remortgaging - although always consider ERCs.

It’s not always straightforward to understand whether porting is the best option for you, so speaking to a mortgage broker for advice is highly recommended.