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Porting your mortgage

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Porting your mortgage

  • Exclusive Rates
  • Free No Obligation Advice
  • 5* Reviews
  • Personal Service

Porting a mortgage – what is it?

Porting is the term used for transferring your mortgage scheme from one property to another, for a purchase.

Porting relates to the scheme itself, i.e., the fixed scheme etc. Other aspects of your original mortgage such as the remaining term, mortgage payments, repayment type can be amended. This is, however, always subject to your situation and the lender’s criteria at the time.

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In this guide:

How does porting a mortgage work?

Mortgage porting enables one mortgage scheme to be transferred between two properties during a purchase. Porting can therefore enable you to avoid any early repayment charges (ERCs) a current scheme may have.

How do I know if I can port my mortgage?

It is vital however, to understand that just because your mortgage scheme is portable, that a lender will not always agree your new mortgage. You will still have to fulfil their criteria at that time. For example, if you do not pass their affordability assessment, they can still decline your application. This is regardless of any ERC you may then have to pay to them if the loan is redeemed.

One thing to also bear in mind is that you cannot have two different mortgages with two different lenders when moving. Therefore, you can’t simply port your current scheme with your present lender and get the additional borrowing (if required) somewhere else.

What to do if my mortgage isn’t portable?

Not all mortgages are portable. The terms of your current mortgage would have been detailed to you within your original key facts illustration and the mortgage offer. If you are thinking of moving and your scheme is not portable, you really just have two options:

  • Do not move until any ERCs expire.
  • Factor in the additional costs of any ERCs.

Never make any assumptions regarding your mortgage being portable when you take it out. Always ensure you read the terms and conditions.

There is never a guarantee that you will be able to port the mortgage. It is still dependant on the lender’s criteria and your situation at the time. However, it is always worth knowing, and should at least be considered when you first take it out.

 

Can I port my mortgage to another property?

If your mortgage terms and conditions allow your mortgage to be ported, then this can be given consideration. Do bear in mind that this can only be done on  a purchase. As such, a mortgage can’t be transferred to a property that you already own.

The transfer can also only be done between two like-for-like occupancies. i.e., you cannot port a Buy-to-Let mortgage onto a property you are to live in.

Can I port my mortgage to another more expensive property?

Yes, you can port your mortgage to a more expensive property, providing it’s portable. When mortgage porting, this can usually only be done on a like-for-like basis. This means that you can only transfer the amount you have outstanding on the current scheme. Should you need to borrow any additional funds, these will have to be on an alternative rate available with the existing lender.

You can, however, change other aspects of your ported loan arrangements where possible, such as increasing the term if necessary.

Can I port my mortgage to another cheaper property?

You can indeed port your mortgage to a cheaper property, providing it’s portable. You may still need to borrow the same amount. However, for many, this would also involve borrowing less.

Your scheme may permit a penalty-free reduction of a certain percentage in such circumstances. However, this is not always the case. You may find therefore, that if reducing your loan size, it may still incur an early repayment charge.

Whilst it is not advisable to borrow more money than you need, it is worth calculating how much any penalty would be, and for how long. You can then work out if a reduction is best immediately or later down the line. For example, when your penalty reduces or expires. If you are unsure of this, speak to your mortgage broker who can go through the numbers with you.

 

Benefits and drawbacks of mortgage porting

Benefits Drawbacks
  • Can save you paying an Early Repayment Charge.
  • You may get greater flexibility from your current lender.
  • The interest rate may be very competitive in the current market.
  • You may end up with a less beneficial rate.
  • You may have two or more different schemes expiring at different times to review.
  • It may restrict your choice for a new property if only working to your current lender’s criteria.

 

What factors affect my chances of porting my mortgage?

If you wish to port a mortgage, and your scheme will permit this, you will still need to be approved by your lender. Just because you have a mortgage already, does not guarantee you will be able to transfer it. Your personal circumstances will still be taken into consideration, such as:

  • Your credit score – what is your credit situation like now?
  • Your affordability – does the lender feel you can still afford the mortgage payments following your move?
  • Your employment status – have you recently changed job or started self-employment?

 

Is there any situation in which I shouldnt port my mortgage?

Just because your mortgage is portable does not mean you should do this. A few reasons as to why it may not be best to do this are:

  • The cost of borrowing is more. It may be more financially beneficial to pay any ERCs. The rate and setting up costs could make this more expensive than a completely new scheme. This could especially be the case if you had a higher rate, due to having bad credit that has now improved.
  • Future planning may be made more difficult. If borrowing more, this will likely be on an alternative scheme. This in turn will have a different expiry date to that which is being ported, meaning that you will have to review your mortgage in stages, and it could restrict your future choice. It could also cost more in the long run due to this.
  • Security. You may have a short period of time left on your scheme being ported. However, you may want to have longer security from the outset and not risk what rates may be in the future. Whilst this may incur an early repayment charge, this could be “worth it” for the peace of mind it provides you.

 

Frequently asked questions

Yes, it is possible to port your mortgage with bad credit, providing the term allows. However, if your credit status is such that your lender will decline you, this is within their rights to do so. Much will depend on your personal circumstances following the move, and how this differs from those of now. It will include the level of borrowing together with any change in the loan-to-value in relation to the lender’s risk.

Porting a mortgage is when you transfer your current mortgage scheme’s terms and conditions to a new property being purchased with the same lender. Remortgaging is when you change an existing mortgage to a new lender, typically for a new scheme when your current one expires.

When porting a mortgage, you will find that many of the usual fees for arranging this will still apply. These being:

  • Survey or valuation fees.
  • Arrangement or booking fees.
  • Solicitor’s fees including any disbursements e.g., searches.
  • Stamp duty where relevant.

You don’t need to give notice when porting a mortgage. However, it is worth mentioning it to your solicitor, so they’re aware of any ERCs are not applicable where relevant.