Porting a mortgage. How easy is it?
If you are already a homeowner and intend to move home, you can often take your existing mortgage with you. This is called “porting” your mortgage and can be more cost effective than taking out a new mortgage and avoid being hit by costly early-repayment charges. For example, if you were tied into a fixed-rate for five years and decided to move house after two years, you might be subject to an early-repayment charge. This could be between 1% and 1.5% of the outstanding mortgage, so could run into thousands of pounds. If you port your mortgage you avoid paying this penalty, as well as removing any possibility of having to pay an early exit fee as well.
In theory porting a mortgage sounds easy, but in reality it can be tricky, especially if you are moving to a more expensive property and it can actually end up costing you more than re-mortgaging to a new deal.
How do I port my mortgage?
The first step is to seek expert mortgage advice. Your current lender and mortgage deal might not permit you to port your current one to your new house.
Although you might be an existing mortgage client, you and the property will need to meet your lenders current policy details. Your own personal circumstances may have changed since you took the mortgage out (particularly over the last two years with the pandemic) making you a higher-risk borrower as the lender might take another look at your affordability and credit history.
How long does it take port a mortgage?
Porting a mortgage usually takes at least a month from applying. Once approved, the mortgage offer is valid for around 90 days with most lenders.
Lenders have rules as to the length of time between the sale of an existing property and the purchase of your new property. These rules will be strict and if exchange and completion is delayed this may mean an early repayment charge not being refunded.
Porting your mortgage to a more expensive property.
When moving home, you may be trading up to a bigger, more expensive property. You can’t borrow more on the rate that you already have with your lender, so you will need a top up rate to borrow more money, meaning the mortgage will have one or more parts. You will need to renegotiate the mortgage more often adding additional fees and costs and your existing lender does not have to agree to the additional borrowing.
The existing rate and top up rate may not be the most competitive option. We will never advise our clients to pay an early repayment charge, but we will make them fully aware of the impact of porting in comparison with a new mortgage.
How do I decide whether or not to port?
Weighing up all these factors can be a bit of a juggling act. As you can see, it requires you to know what other mortgage deals are available to you.
What should I do next?
For a free, comprehensive review, I would strongly recommend speaking to Mell, she is vastly experience, well respected within the industry, and easy to talk to. She has already helped people who contacted her following my previous blog about mortgages. (You can read that one by clicking here.)
How much does this cost
Its cost you a phone call. Ring Mell directly on 07918 275037
You may have to pay an early repayment charge to your existing lender if you remortgage. Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
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