Porting a Mortgage: Everything You Need to Know

Porting a mortgage is when you transfer your existing mortgage to a new home, rather than taking out a new mortgage. Read on to find out how to port your mortgage and the pros and cons of doing so.

John Fitzsimons Last updated on 01 October 2021.
Porting a Mortgage: Everything You Need to Know

Finding a new home doesn’t necessarily mean that you need to give up your current mortgage deal. Instead, by porting your mortgage, you could take your interest rate with you to your new home.

Read on to find out more about the porting process, and whether it’s right for you.

What is porting a mortgage?

If you are a homeowner and want to buy a new property, you have a few options when it comes to your mortgage.

Some people will use the money raised from the sale of their property to pay off their existing mortgage, then take out a new one to cover the cost of purchasing their new home.

However, you may instead be able to port your mortgage, which is where you effectively keep the same mortgage but transfer it to your new property.

How does porting a mortgage work?

It is worth emphasising that porting means you transfer the terms of your mortgage to your new property.

That means keeping the same interest rate, the same fixed-rate period and the same fees. However, depending on the lender you may be able to change the terms of your mortgage ‒ for example, extending it from 25 years to 30 years or switching from a joint to a single-person mortgage.

Many lenders will highlight that their products can be ported to a new property, but it’s important to remember that this is not guaranteed. The lender can turn down your request to port the loan.

» MORE: How to get help with your mortgage

How to port a mortgage?

First, you will need to check the terms and conditions of your existing mortgage. This will clarify whether porting your rate is possible or worthwhile.

While you won’t be applying for a new mortgage from your lender, you do still have to formally apply to port it over to your new property.

Your lender will then need to carry out certain checks. For example, it will want to ensure that you can still afford the mortgage and that you meet its eligibility criteria. As a result, if your circumstances have changed, or the lender's criteria has changed your application may be turned down.

The pros and cons of porting a mortgage

There are a few obvious benefits to porting a mortgage. For example, if you’ve managed to secure a particularly low interest rate and rates across the market have since risen, porting may ensure you keep that great rate.

Porting also means you can avoid exit fees from your initial mortgage. These early repayment charges are levied if you are still in the middle of an initial fixed or variable period, and are calculated as a percentage of the outstanding mortgage balance, so can run to many thousands of pounds. By porting you don’t have to pay those fees as you are keeping the same mortgage terms, which could save you money.

» MORE: Do I need a mortgage adviser?

There are some potential downsides to bear in mind, though. For example, porting your mortgage may mean you don’t bother shopping around to see how your current rate compares. It may be that by switching to a new lender, or at least a new mortgage, you could enjoy a reduced monthly mortgage bill.

Things can also get complicated if you are buying a more expensive property and need to borrow more, as any additional lending will not benefit from your existing deal and the terms may be less favourable than if you had shopped around.

» COMPARE: Remortgaging deals

Can you port a mortgage with bad credit?

This will come down to your individual lender. When porting a mortgage, the lender will carry out affordability checks to ensure that you can still afford the loan. If you had a perfect credit record when you took out the initial loan but your score has taken a hit since then, the lender will be more wary about approving your application.

However, if you already had a less-than-perfect credit score when you took out the mortgage, still having an imperfect score may not prove a barrier to porting your home loan – talk to your lender if you have concerns about your credit score.

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Can I port my mortgage to a cheaper house?

If you have found a cheaper home to purchase than your current property, you may require a smaller mortgage. This does not mean that porting your mortgage is impossible.

However, if your mortgage is subject to early repayment charges, you may have to pay this fee on the difference between your current mortgage and the size of the borrowing you require for the new property.

For example, if you have a £200,000 mortgage and only need £150,000 for the new property you may have to pay an early repayment charge. If this was 3%, you would have to pay that on the £50,000 difference, which would come to £1,500.

Image source: Getty Images

About the author:

John Fitzsimons has been writing about finance since 2007. He is the former editor of Mortgage Solutions and loveMONEY and his work has appeared in The Sunday Times, The Mirror, The Sun and Forbes. Read more

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