If you’ve got a mortgage with a low interest rate, and a manageable monthly repayment, you are probably wondering, “Can I move house and keep the same mortgage?”. The short answer is yes, in some cases it is possible to take your mortgage with you when you move house.
Moving a mortgage to a new house is called ‘porting’. But, it’s not as simple as just continuing with your current mortgage payments. ‘Porting’ requires you to undergo another application process - with all the credit and valuation checks that this entails.
Here we look at how porting works, and whether it could be the right option for you.
Of course, if you have any finance or mortgage related questions, the Portico Finance team can help! Get in touch with us if you have questions or would like mortgage advice, read our finance FAQs, or get an up-to-date estimate of your property’s value with our online valuation tool.
How to move house with a mortgage: Porting
‘Porting’ means that you continue with the same conditions as your current mortgage but the loan will be secured against your new property.
Things to consider
The first thing to bear in mind is that not all mortgages are 'portable'. You can find out whether it’s an option for you by looking at your original offer letter, or by getting in touch with your mortgage lender.
If porting is an option, the next step is to submit an application. This follows a very similar process to applying for a mortgage. Your lender will want to value the property you’re hoping to buy, and do a range of financial checks to make sure you can afford your repayments.
It’s important to remember that even if you are technically allowed to ‘port’ your mortgage, your lender is still able to reject your application if you don’t pass these checks. You might find it more difficult to transfer your mortgage if you're looking to move to a more expensive house, or your earnings have changed.
If you’ve had your mortgage for some time, you might find your lender’s affordability criteria has changed too.
The best thing to do, is to discuss your options with a mortgage broker or an independent financial adviser at Portico Finance, before you apply. They’ll be able to advise you on the range of options, and your likelihood of being accepted if you choose to 'port'.
What if you’re moving to a cheaper, or a more expensive property?
Things get a bit more complicated when you’re buying a property that’s worth a different amount to your current home.
Mortgage lenders need to make sure that your new home provides enough security against their loan, in the unlikely case you're unable to pay.
Because of this, if you’re moving to a cheaper home, your provider might only offer to cover an equivalent percentage of the house, rather than transferring the full monetary value of your mortgage over. For example, if your current mortgage covers 80% of the value of your house, your lender will cover 80% of your next property purchase, even if this is less than your current mortgage loan.
On the other hand, If you’re purchasing a more expensive property, you’ll have to meet the affordability requirements for a bigger mortgage. If your lender is willing to offer you a larger mortgage, they may require you to borrow under their current terms - which may be different to the rest of your mortgage. If this is the case, consider carefully whether porting makes financial sense for you.
Should I port my mortgage (move house and keep the same mortgage)?
Whether or not you decide to port your mortgage will depend on your personal situation. Make sure you weigh up the pros and cons (in particular, the costs) before you decide.
Neither porting, nor applying for a new mortgage are free. If you’re porting you will likely have to pay a valuation and an arrangement fee. If you decide to go with a new lender, you'll also have to pay the exit fee and any early repayment charges on your current mortgage.Before making your decision, weigh up whether the financial savings of each option outweigh the costs. For example, you might find that the interest rate on a different mortgage product is appealing enough that you’ll save money, even after paying the fees to leave your current lender.
Get in touch with Portico Finance to discuss your options
If you’ve recently taken out a low interest fixed-rate deal, it probably makes sense to port your mortgage. On the other hand, if you’re coming to the end of your fixed term, it’s possible that you’ll be able to find a cheaper alternative with a bit of shopping around, particularly as interest rates are at a historic low of 0.10% at the moment.
If you’re unsure of the best option for you, make sure to seek advice from an independent mortgage broker or financial adviser at Portico Finance. We will be able to provide advice tailored to your specific situation and make sure you are getting the best deal possible. Get in touch with our finance experts at firstname.lastname@example.org or give us a call on 0207 731 9680!.