Porting your mortgage

If you're moving home, one option is to port your mortgage. We look at what this means and how it works to help you determine if this is the right choice for you.

What does ‘porting a mortgage’ mean?

'Porting a mortgage' means you can move your current mortgage deal to a new property.

You'll be taking out a new loan with your existing lender, but taking on the same terms and conditions, just starting over again with a new home.

What's the difference between porting a mortgage and remortgaging?

Porting a mortgage is similar to remortgaging, but you’re staying with the same lender and asking them to transfer the deal to a new property.

Remortgaging means taking out a completely new mortgage - either for your new home or for your current property, such as to fund renovations.

Because you’ve usually built up more equity, you may access better rates or introductory offers, but it can still cost more overall once you factor in exit fees and new arrangement fees.

How does porting a mortgage work?

To port a mortgage, you need to reapply for your current deal with your lender. They’ll reassess your affordability, looking at things like:

• Your income and regular spending
• Any existing debts
• Your credit history

If you don’t meet their criteria, they can refuse the port even if you’ve kept up with repayments. In that case, you’ll need to decide whether to:

• Remortgage to a new deal
• Or stay on your current deal until it ends

If your lender approves the port, you may also need to pay for a valuation on the new property.

Porting a mortgage to a more expensive property

If you’re buying a more expensive home, you’ll usually need to borrow extra to cover the difference. That means going through your lender’s affordability checks again, and there’s a chance you may not be approved.

You also might not be able to keep your current interest rate on the extra borrowing - lenders often put the additional amount on a different, sometimes higher, rate.

Porting a mortgage to a cheaper property

If you’re downsizing, a portable mortgage can work in your favour, but you’ll still need to pass your lender’s affordability checks. You may also need to pay fees, such as a valuation fee for the new property.

Are all mortgages portable?

Most mortgages are portable, but it's worth discussing with your lender whether it's possible before making a decision.

Even if you can port your mortgage, you need to go through the process of re-applying for a mortgage where you'll be subject to your lender's affordability checks again.

There's a chance your current lender may reject your application, even when you currently have a mortgage with them. This could be either because your circumstances have changed or the lender now has stricter borrowing rules.

Why would you port your mortgage?

You might choose to port your mortgage if you have a good mortgage rate and you want to hold on to it.

They’re also useful if your mortgage has an early repayment charge (ERC) attached to it.

If you remortgage you essentially pay off your existing mortgage and take out a new one, causing an ERC.

ERC's can cost thousands of pounds. So if you port your existing mortgage instead of remortgaging, you could potentially save money.

The downside is that the lender isn’t legally obliged to port your mortgage, and on some occasions it might be easier to remortgage.

Are there circumstances where I wouldn’t be able to port my mortgage?

Yes, you may not pass the affordability checks to port your mortgage if your personal circumstances have changed. For example:

• You’re now on a lower income
• You've previously missed many monthly repayments
• You're moving to a more expensive property

What is a mortgage prisoner?

If you can’t change your mortgage for some reason, you might be a mortgage prisoner.

This means you don’t pass the affordability checks carried out by the lender or there are limited lenders available who are wiling to accept you. So your only option might be to stick with your current deal.

But there are some ways you can free yourself from mortgage prison, such as:

• Overpaying your mortgage – check with your lender how much you can pay without the early repayment charge.
• Increasing your equity – which is the portion of the home you own as it raises your chances of qualifying for better mortgage rates. You can do this by overpaying.
• Reducing your debts and outgoings – that way the lender can be more confident that you can make the monthly repayments.
• Downsizing to a smaller home - moving to a smaller home with a lower property value or to an area that's less expensive means you won't need to ask for additional borrowing.