Can you keep your existing mortgage when you move home?
Mortgage lending rates have hit record lows recently, so for some people its been the right time to buy or remortgage to secure a better deal. But when it’s time for you to move home, you might lose that deal. If you want to hold onto it, you could consider mortgage porting if your lender approves this.
What is mortgage porting?
Porting is the process of moving your current mortgage to a new property so that you can repay under exactly the same conditions as you did at your old home.
Why would you want to keep your mortgage?
If you’re happy with your current mortgage deal and you don’t want your repayments to change, you won’t want to search for a different deal just because you’re moving home.
Does porting work with any mortgage?
No, not all mortgages are portable. You’ll need to speak to your current mortgage provider to find out what their porting options are.
How does porting work?
After you’ve confirmed with your mortgage provider that porting is an option, you’ll need to submit an application. As with your original application, your mortgage provider will conduct an affordability assessment and a valuation of the new property. So, your application to port can still fail at this point, if your financial situation has changed or if the valuation is unsuccessful.
Can you port a mortgage to a more expensive property?
If you need to increase your borrowing as well as moving the mortgage, you’ll need to pass the affordability assessment for the amount you want to borrow. It’s still possible to do, as long as your borrower sees sufficient evidence that you’ll be able to make the necessary repayments.
Can you port a mortgage to a cheaper property?
Moving to a cheaper property might mean that your mortgage provider won’t lend you as much money. This is because they typically require you to have equity in the property, and will only lend up to a maximum percentage of around 80-90% of the property value.
For example: If your current property is worth £200,000 and you have 20% equity, you owe the mortgage provider £160,000. If you then move to a property worth £160,000, the mortgage provider will be reluctant to lend you 100% of the property value, as it will be more difficult to recoup the money lent if you default on the loan. They may only lend you 80% of the property value, or £128,000.
How can you be sure that porting is the right option for you?
There’s no right answer for everyone, so it’s best to discuss your circumstances and obtain professional mortgage advice to find out what all of your options are and which might suit you.
All Rights Reserved. Information contained in this article and on our website does not constitute advice and is provided for information purposes only. Recipients should not act upon it, but should seek professional advice relevant to their own situation.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.