Porting a mortgage: how it works

Moving home but love your mortgage deal? You might be able to take it with you. That's called porting. Here's how it works, what it could cost and when it's worth doing.

Key takeaways

• Porting a mortgage means moving your current deal to a new home. You're not moving the loan itself.
• You'll go through your lender's affordability checks again, so a yes isn't guaranteed.
• If you need to borrow more, the extra usually goes on a separate deal at a different rate.
• If you need to borrow less, you may pay an early repayment charge on the part you don't port.

What does ‘porting a mortgage’ mean?

Porting a mortgage means taking your current mortgage deal with you when you move home. You keep the same interest rate and terms, just on a new property.

Here's the bit that trips people up. You're moving the deal, not the loan. In practice, you pay off your old mortgage and take out a new one with your existing lender, which copies your old deal. That's why you still have to apply.

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

With porting, you stay with your lender and keep your current deal. With remortgaging, you switch to a brand new deal. That could be with your current lender or a new one, and it could be for your new home or your current one, say to fund renovations.

Porting can save you money if your rate is a good one. But a new deal could be cheaper, especially if rates have dropped since you took out your mortgage. Either way, you might pay fees. Add up the costs of both before you choose. A broker can run the numbers with you.

How does porting a mortgage work?

Every lender has its own process, but it usually goes like this:

• Check your mortgage documents. See whether your deal is portable and what the porting rules are.
• Talk to your lender early.Tell them you're thinking of moving and ask how much you could borrow.
• Get an offer accepted on your new home. You'll usually need this before you can give your lender the address and apply.
• Apply to port. Your lender will check your affordability again, including your income and regular spending, any existing debts and your credit history. They might also value the new property, which you may need to pay for.
• Sort out any extra or reduced borrowing. More on both below.
• Complete your sale and purchase together. Lining them up makes porting much simpler.

If you don't meet your lender's criteria, they can say no, even if you've never missed a payment. If that happens, you can either remortgage to a new deal or stay on your current one until it ends.

How long does porting a mortgage take?

It usually takes about as long as applying for a new mortgage, which can be anywhere from 2 to 6 weeks. It depends on your lender and how quickly your sale and purchase move.

Start early. Your port, your sale and your purchase all need to line up, and a delay in one can hold up the others.

Porting a mortgage to a more expensive property

If your new home costs more, you'll usually need to borrow extra. That means passing your lender's affordability checks again, and there's a chance you won't be approved.

You also might not keep your current rate on the extra. Lenders often put it on a separate deal at the rate they're offering at the time. That rate could be higher, and the deal could come with an arrangement fee.

Here's how it could look. Say you owe £150,000 and you need a £200,000 mortgage for your new home.

Having 2 deals can add a wrinkle. They might end on different dates, so each could move to your lender's standard variable rate at a different time. Keep an eye on both end dates.

Porting a mortgage to a cheaper property

Downsizing? Porting can still work in your favour, though you'll need to pass your lender's affordability checks and you might pay fees, like a valuation fee for the new home.

The catch is the difference. If you borrow less than you owe, you may pay an early repayment charge on the part you don't port. Say you owe £200,000 and only need £150,000. You'd port £150,000, and an early repayment charge could apply to the £50,000 you pay off. That can run to thousands of pounds, so ask your lender for the exact figure before you decide.

Can you port a mortgage if you sell before you buy?

Porting is simplest when you sell and buy at the same time. If you sell first, you may have to pay off your mortgage before you've found your next home. Some lenders will still let you port if you apply for your new mortgage within a set time, but that window varies. Ask your lender before you sell.

If you buy first, you might hold 2 mortgages for a while. You may also pay extra stamp duty on the new home and be able to claim some back after you sell, depending on where you live.

How much does it cost to port a mortgage?

Porting isn't free. Depending on your situation, you might pay:

• An early repayment charge on any part of your mortgage you don't port
• An arrangement fee on any extra borrowing
• A valuation fee for your new home
• Legal fees
• Stamp duty on your new home, which you pay even if you port
• An exit fee when your old mortgage is paid off. Some lenders call it a deeds release fee, so check whether you've already paid it

Add these up before you compare porting with a new deal. Sometimes a different lender's deal still works out cheaper, even after fees.

Are all mortgages portable?

Many are, but not all. Check your mortgage documents or ask your lender. Some products, such as certain shared equity or Right to Buy mortgages, may not be portable as standard.

Even if your deal is portable, you'll still have to reapply, and your lender will check your affordability and the new property. They can say no if your circumstances have changed or their rules have got stricter. They're not legally obliged to say yes.

Is porting your mortgage a good idea?

It depends. Porting can make sense if:

• You've got a rate you want to keep
• You'd pay an early repayment charge to leave your deal, and that charge could cost thousands of pounds
• There's plenty of time left on your deal

And it might not if:

• Your deal is nearly over, so you've got little to lose by switching
• You need to borrow a lot extra at a rate that isn't competitive
• Other deals on the market are cheaper, even after fees

Your lender also isn't legally obliged to let you port, and sometimes it's easier to remortgage.

When might you not be able to port your mortgage?

You may not pass your lender's checks if your circumstances have changed. For example, if:

• You're now on a lower income
• You've missed a lot of monthly repayments
• You're moving to a more expensive property
• Your new home is a type of property your lender doesn't like

What is a mortgage prisoner?

If you can't switch deals because you don't pass affordability checks, or few lenders are willing to take you on, you might hear the term mortgage prisoner. It's a tough spot, but there are ways out:

• Overpay your mortgage – check with your lender how much you can pay without the early repayment charge.
• Build your equity – which is the part of your home you own. A bigger share can improve your chances of better rates.
• Cut your debts and outgoings – so your lender can be more confident you can afford repayments.
• Downsize. A smaller or cheaper home means you won't need to borrow extra.