If you’re partway through a fixed-rate mortgage and want to move home, you might worry about early repayment charges. One option is to port your mortgage: taking your existing deal with you to the new property. It can be a useful way to keep a good rate and avoid penalties, but it isn’t automatic, and it doesn’t suit everyone.
What does porting mean?
Porting means transferring your current mortgage product, including its interest rate and remaining term, from your existing home to a new one. Most mortgages are described as “portable”, but that only means you can ask to port. The lender still has to approve the new application.
You’ll need to reapply
Porting usually involves a fresh application. The lender will reassess your affordability, check your credit, and value the new property. If your income has fallen, your outgoings have risen, or the lender’s criteria have tightened since you took out the mortgage, you might not be approved for the same amount.
Borrowing more
If you’re moving to a more expensive home, you may need to borrow extra on top of the amount you’re porting. The additional borrowing is usually on a separate product at the lender’s current rates, so you’d end up with two parts to your mortgage, often with different rates and end dates. That’s not necessarily a problem, but it can make future remortgaging more complicated.
Borrowing less
If you’re downsizing and need a smaller mortgage, you may be able to port part of your loan. However, repaying the difference could trigger an early repayment charge on that portion, so check your terms carefully.
Timing matters
Some lenders require the sale and purchase to complete on the same day to port. Others allow a gap, during which you might pay the early repayment charge up front and have it refunded once the new mortgage is in place. If there’s a delay between selling and buying, check the lender’s rules before you commit.
Is porting always the best option?
Not necessarily. Porting makes most sense when your current rate is competitive and the early repayment charges are significant. But if rates have fallen, or your charges are small or about to expire, it may be better to pay the charge and take a new deal elsewhere. The only way to know is to compare the total costs side by side.
Questions to ask before you move
- Is my mortgage portable, and what are the conditions?
- How much would the early repayment charge be if I didn’t port?
- What rate would any additional borrowing be at?
- Does the sale and purchase need to complete at the same time?
Your home may be repossessed if you do not keep up repayments on your mortgage.
We can compare the cost of porting against switching to a new lender, and handle the application for you so your move stays on track. Get in touch for a free consultation.
