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You don’t always need a new mortgage when you buy a new home. Most mortgages are “portable”, so you can take your current deal with you.
Porting your mortgage is popular because you don’t have to pay early repayment charges (ERCs), but as current interest rates for UK mortgages are higher than they've been in some time, some people will also want to take their existing deal with them.
You can be turned down - Even though you're keeping the same mortgage, you’ll essentially need to re-qualify, which means affordability checks will be carried out. The lender will also need to value your new property
It can be difficult when upsizing - If you’re moving to a more expensive property, not all lenders will be willing to increase the size of your loan when you port your mortgage. They might insist that you have a separate mortgage to make up the difference in cost, meaning you could end up on two different interest rates and sets of terms
If you're unable to port your mortgage, or want to see if there are more competitive deals available, a home mover mortgage with your current lender or a new one could be used to purchase your new home.
You may have to pay a fee to leave - Early repayment charges (ERCs) usually apply if move to a new mortgage before your existing mortgage deal ends. Check how much you’ll have to pay to move now, to find out whether you'll benefit more by switching mortgages or porting your current one
If you’re downsizing, porting may be cheaper - There are fewer costs involved in porting your mortgage than setting up a new one, and it can be much quicker. If you don’t need to borrow more when you move, this can be a preferable option for some people
Your existing mortgage may be on better terms than any home mover mortgages that are available to you
You won’t need to pay ERCs or wait out the end of the deal to avoid them
You won’t have an arrangement fee to pay
It's typically quicker and easier
You could get a better mortgage deal than your current one
If your existing lender is unable to extend your borrowing without you taking out a second mortgage with them, it could be easier to set up a single new mortgage with another lender
You’d have the opportunity to change your interest rate type, repayment type or find more flexible terms when switching to a different deal
This can be a tough decision to make, so it may be worth speaking to a mortgage broker who can look at the whole market to find out whether porting or switching mortgage deals is the best option for you. They will also have access to deals not available to the public.
Whether you're moving to a more expensive home, downsizing to a lower value property or buying one that's equivalent to your current home will impact your decision on whether to port your existing loan or take out an entirely new mortgage:
When you look at a costlier home, you'll need to consider the loan-to-value or LTV. This may be higher, because the property is more expensive, but if you have equity in your home, it may balance your LTV.
The lower your LTV – the better the deals you’ll be offered, and if your new property would significantly increase your LTV, you won't always qualify, depending on your current circumstances.
Some lenders will allow you to increase your loan size when you port your mortgage, which will likely be the easiest option. However, your lender may want you to take out an additional loan for the extra borrowing. For example, with HSBC, porting your mortgage and borrowing more means you'll have a new rate for the additional borrowing.
If you’re buying a less expensive property but want to keep the same size of mortgage, your LTV will increase - as the loan is a larger proportion of the new property's value.
For example: a £70,000 mortgage on a £140,000 property is 50% LTV
A £70,000 mortgage on a smaller £100,000 property is 70% LTV
Even though you're borrowing less overall, your loan is a higher percentage of the total property value
If you’re moving to a property of a very similar value then porting can be the simplest option. If you’re buying a much cheaper home, your lender might not allow you to port if the LTV of your borrowing would increase dramatically. They may ask you to repay some of the loan to maintain your current LTV.
If you're unable to meet your current lender's requirements for porting to a cheaper home, you'll could potentially take out a new mortgage with another lender.
However, this could mean paying ERCs to your existing lender if you leave the deal early. You'll also need to meet the criteria of the new lender.
Sort of, although it's usually not a cash deposit, like first-time buyers need to provide:
Equity is the proportion of your home that you own compared to its current value. This included your original deposit, what you’ve repaid of your mortgage and any increase in property value.
If you’ve built up equity in your current home, you'll can use it as a deposit when buying your next home. The level of equity you have will typically need to match the lender’s minimum deposit requirement for that size of loan, but some may accept an additional cash deposit to top up the equity.
Having substantial equity in your home is likely to make it easier to increase your loan size if you port your mortgage to a more costly property.
Negative equity is when your home is worth less than your outstanding mortgage balance. It usually happens when house prices fall - but can also be when you miss mortgage repayments.
The risk of negative equity is higher, the your deposit when you take out a mortgage
If you’re in negative equity it will be more complex to move home, as many lenders are reluctant to offer new mortgages or port existing mortgages in these circumstances.
It’s always a good idea to speak to a mortgage broker before discounting moving house entirely. For many people, however, waiting until the value of your property rises again or overpaying the mortgage to try and reclaim some equity will be the best option.
There's a lot to think about when moving home. Porting your current mortgage won't always be the most suitable option for your circumstances, but speaking to a mortgage expert will help you feel confident that you've considered all options available and chosen the most suitable.”Kellie Steed, Mortgage Content Writer
Yes, you can, as you're not changing your mortgage if you choose to port it. This is simply transferring your existing deal to your new property. However, you won't avoid affordability and credit checks and the new home will still need to undergo valuation.
Porting typically allows you to keep the interest rate that you locked in when you bought your home, which in most cases, will be more competitive than those available in the current market.
It depends on whether you need to borrow more (or less) money when you move into your new home. If you’re porting your mortgage on the same terms, your repayments will usually stay the same, but it’s not very common to find a new home that's valued at the exact same cost as your current one, so it’s a good idea to expect at least some change in your repayments.
When you move house, the equity in your current home (what you own, versus the value of the property) can be used as the deposit for any new mortgage you take out. This means you don’t typically have to save up a deposit as you would if you were a first-time buyer.
You can improve your LTV (loan to value) ratio by using additional savings to boost your deposit. But you may also need to use a cash deposit alongside your equity if it's not sufficient to meet the lender’s minimum LTV requirements.
You can sometimes increase your borrowing when you port your mortgage, although you will need to meet the lending criteria for the larger loan. Some lenders will want you to take the increased loan as a separate mortgage, which means that you could end up with two mortgages at two different rates with the same lender.
In this case it may be easier to remortgage onto a new home mover product. This way you can apply for the additional borrowing and repay your existing mortgage with one mortgage. Of course, you will still need to meet the affordability criteria with the new lender.
An agreement in principle likely won’t be as important when moving house as you're showing serious intent as a buyer simply by having listed your own property for sale. It can, however, be helpful to know what sort of loan you could get if you’re upsizing to a new home, as this will help save the disappointment of making an offer on a house that you cannot realistically afford.
It can do, although this is more likely if you move house regularly, as living in one place for a long time is seen as a sign of stability. It can also take time to be reinstated on the electoral roll at your new address, meaning creditors can’t use the list to verify your identity for a short time.
Another way that moving house could potentially impact your credit file is if you make multiple applications for a mortgage before being accepted. This is because every lender will carry out a credit search and multiple searches over a short period of time can reduce your score.
A mortgage broker can help you to avoid the latter by ensuring you approach a lender whose criteria you are most likely to meet.
It depends whether you are porting your mortgage or taking out a new home mover mortgage. If you're porting, some lenders will allow you to porting within a designated time frame, although this is typically 30 days. If you think it's going to take longer to sell your existing home then is may be easier to opt for a new mortgage. This way a mutually agreeable completion date can be arranged.
Last updated: 05 September 2023