Mortgage porting; Can I transfer my mortgage to another property?

In this brief guide, we are going to answer the question “can I transfer my mortgage to another property”.

A lot of people wonder if they can take or transfer their mortgage with them to another property when they move homes and indeed a lot of mortgages are portable but there are several pros and cons you must look into before making a decision.

You should first ask your mortgage lender if your current mortgage is portable.

Can I transfer my mortgage to another property?

Yes, you can transfer your mortgage to another property and this is known as mortgage porting. Mortgage porting or porting your mortgage is when you take your existing mortgage with all its features( such as the mortgage rate, the mortgage terms etc) and move it over to a new property. You will still have the same mortgage lender. 

When you port your mortgage, you essentially pay off your existing mortgage and then restart it on a new property.

What is mortgage porting?

Mortgage porting is the act of taking your existing mortgage to a new property. You will usually do this when you are selling your old property and buying a new one and want to keep your mortgage the same.

What you should know about transferring your mortgage to another property

Before getting a mortgage, you should ensure you have considered if the mortgage is portable or not and on what terms.

Porting is the process of moving your mortgage from one property to the other.

Although the process is described as such, porting usually involves paying off your mortgage with the sales proceeds of your home and then starting a new mortgage on your new property with the same terms.

Porting your mortgage might not always represent the best value so be sure to shop around for a new mortgage first with the help of a mortgage broker.

Mortgage porting is like getting a new mortgage, the mortgage lender will need you to resubmit the same type of mortgage documents it requested from you when you initially got your mortgage as well as carry out a property valuation to determine if the property is suitable security for them.

What fees are involved with mortgage porting?

Porting your mortgage avoids most but not all of the typical mortgage origination fees you will usually expect to pay when you get a new mortgage.  This is usually dependent on the mortgage lender.

You may still be liable for any early repayment charge attached to the mortgage if you are still within your introductory rate period.

Most mortgage lenders will waive the early repayment charge on your mortgage if you port your mortgage. 

Its a bit of an incentive to stick with the mortgage lender but you should consider the opportunity cost and weigh up if it is better to find a new mortgage lender even with the savings gained by not paying any early repayment charge when you port your mortgage.

You may also be liable for an exit fee and new mortgage origination fees based on your mortgage lender but these fees could be waived as well if you port your mortgage.

Some of the fees you can expect to pay when you port your mortgage include:

Mortgage valuation fees

Legal fees

Mortgage application fees

Will I qualify for mortgage porting?

You might not qualify for mortgage porting if your credit score is low or your general mortgage affordability isn’t at a satisfactory level.

It is worth checking your current mortgage affordability before applying to port your mortgage.

If you find that you won’t qualify then it is best to boost your mortgage affordability before applying to port to avoid a mortgage application rejection.

You can always port your mortgage to a cheaper property or a more expensive one but this will be all based on if you pass the mortgage lenders mortgage affordability checks for the amount you want to mortgage.

If you want to move to a more expensive property and your lender refuses to loan you any more than you currently borrow you might need to find the extra amount and pay it down as a deposit or take on a second mortgage.

Mortgage porting isn’t a must, you could also use a mortgage broker to find more suitable mortgage lenders that may be willing to lend to you.

When looking at your affordability for mortgage porting, the mortgage lender may look at:

• Your credit score
• Your current debts
• Your income
• Your expenses
• Your future plans

Why you may not be eligible for mortgage porting:

There are various reasons why your existing mortgage lender may reject you for mortgage porting.

• The mortgage lenders affordability criteria have changed and you no longer meet the eligibility requirements
• The lender cannot borrow you more as it has reached its individual lending limit and you need to borrow more due to porting your mortgage to a more expensive property.
• The lender can port your mortgage but you will have to get a second mortgage to fill the gap on the more expensive home you want to move to. Be aware that if the introductory periods of both mortgages end at different times; your monthly payments will sharply increase at different times.
• The property you want may be a non-standard construction property and the mortgage lender does not lend on those.
• You might be able to borrow from your current mortgage lender but at a higher rate due to economic situations changing since your initial mortgage.

**When porting your mortgage it is always advisable to seek the services of a credible mortgage broker.

The pros of transferring your mortgage to another property (Mortgage porting)

There are several good reasons why mortgage porting is loved by many borrowers, they include:

• You can usually avoid early repayment charges when you port your mortgage. Most mortgage lenders will waive off any early repayment charge on your mortgage to encourage you to port your mortgage. This can be very useful if you are still within an introductory deal with an early repayment charge.
• By transferring your mortgage to another property you may still be able to benefit from any grate mortgage deal you are currently on. This is especially the case if the mortgage market has changed for the worse since you took your initial mortgage deal.
• Your mortgage lender may be more willing to lend to you as they have a track record of your repayment behaviour

In some cases, it may be more cost-effective to abandon your current mortgage deal and this is why a mortgage broker is very useful when considering mortgage porting.

A mortgage broker can help you analyse the opportunity cost based on the current mortgage deals on the market and the mortgage offer from your current mortgage lender.

The cons of transferring your mortgage to another property (Mortgage porting)

Some of the cons of mortgage porting include:

• The mortgage deal you are on may now be less competitive than the mortgage deals which are currently on the market.
• If you need to get an additional mortgage (“top-up” mortgage) then the mortgage rate on this mortgage may be much higher and less competitive than what you may be able to find on the mortgage market.
• Your mortgage lender may limit the total amount they may be able to borrow you forcing you to shop for a cheaper home

When is mortgage porting a good idea?

Mortgage porting is a god idea when you have a very competitive mortgage rate than what is currently on the mortgage market.

It is also a good idea when the early repayment charge you may have to pay is very high and you cannot afford it.

Can I borrow more when porting my mortgage?

Yes, you can borrow more when transferring your mortgage to another property but the mortgage lender may request that you take out an additional mortgage for the extra amount you want to borrow if you want to port your mortgage and keep its existing terms and features.

Your mortgage lender may refuse your request to borrow more and at this point mortgage porting will essentially fail except you can get another mortgage or loan on the extra amount you need to borrow from a different mortgage lender.

If you borrow additional funds from a second mortgage then you should try and ensure that the introductory deals on both mortgages end around the same time so you can remortgage both mortgages into one if need be.

Porting your mortgage to a cheaper house

If you want to port your mortgage to a much cheaper house then this could be a very good option as you avoid having to borrow any extra funds and can keep your current mortgage deal.

Even as you are porting your mortgage to a much cheaper house you will still have to go through the mortgage checks and mortgage underwriting process.

When you port your mortgage to a cheaper property it is more likely that the mortgage lender will insist you pay any early repayment charge on the property.

Most mortgage lenders will also let you reduce your mortgage by 10% for free and after that they may charge you a fee.

Porting a buy to let mortgage

Porting a buy to let mortgage works the same way as porting a residential mortgage. You will still have to make an application to the buy to let mortgage lender and you will still have to be assessed to see if you meet the buy to let mortgage lenders affordability criteria.

Can you port a mortgage with bad credit?

You may be able to transfer your mortgage to another property with bad credit but this depends on the mortgage lender and what type of bad credit. 

You may need to use a bad credit mortgage broker who specialises in bad credit mortgages.

Bad credit could include:

Missed credit repayments

Late credit repayments

Defaults (mortgage defaults)

County court judgements

Individual voluntary arrangements

bankruptcies

Debt management plans

Home repossessions

What if your mortgage porting request is refused?

If the mortgage lender refuses your request to transfer your mortgage to another property then you will have to decide if getting a new mortgage from a new lender is cost-effective based in the proposed mortgage rates and any early repayment charge you may need to pay.

FAQs: Can I transfer my mortgage to another property

Can I port my mortgage to a more expensive property?

Yes, you can port your mortgage to a more expensive property but the mortgage lender may require you to get a second mortgage from them. This is also known as a “top-up” mortgage and it will likely be at a much higher mortgage rate.

Is porting a mortgage worth it?

Porting a mortgage may be worth it if you manage to avoid having to pay any early repayment charge and you still have a mortgage rate which is very competitive to what you could get on the mortgage market today

Is porting a mortgage easy?

Porting a mortgage is not “easy”. Everything to do with mortgages should be taken seriously and never viewed as easy to avoid complacency and mistakes.

Is there a credit check when porting a mortgage?

Yes, when porting a mortgage you will have to undergo a credit check in the same way you undergo a credit check when you make a new mortgage application.

What happens to your mortgage when you sell your house and buy another?

When you sell your house and buy another house you can either choose to keep your mortgage by porting your mortgage over to your new house or if you are selling but want a new mortgage then you can simply sell your home, pay off your existing mortgage with the proceeds of the sale and get a new mortgage for your new house.

If you currently have a mortgage and are wondering what to do with it as you are buying another house you should consider the following:

• Are you on a good mortgage rate
• Are mortgage rates rising or falling
• Is it likely you will pass a mortgage affordability check with a new mortgage lender?
• Does your current mortgage lender allow you to port your mortgage?
• Will you have to pay any penalty or fees for moving houses with your mortgage?
• Are you downsizing and hence need a smaller mortgage – if so the lender may charge you fees for getting a smaller mortgage if you reduce your mortgage by more than 10%
• Do you currently have a great introductory mortgage deal

If you are still wondering what happens to your mortgage when you sell your house and buy another house then you should consider speaking to a mortgage broker who may be able to help you understand your mortgage options.

Using a mortgage broker to port your mortgage

You may want to consider using an independent mortgage broker to get a mortgage.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. 

This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. 

Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide, we answered the question “can I transfer my mortgage to another property”.

If you have any questions or comments please let us know.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.