Want to take your mortgage to your new home?

What will you take with you when you move? Most of us wonโ€™t want โ€“ or afford โ€“ to completely refurnish. So, there will be most of your furniture, the things that matter. Your kitchen equipment. Your electric and electronic equipmentโ€ฆ

But what about your mortgage?

Yes, you might be able to take your mortgage with you. Porting (as in transporting) your mortgage might be a very good idea. It could potentially save thousands of pounds.

At Continuum, we are looking at what it involves, whether you can do it โ€“ and whether it is appropriate for you.

Why port your mortgage?

Usually, moving to a new home means moving to a new mortgage, and these days, probably more expensive rate. When porting, you will be transferring the value of your current deal, and the rate, to a new property. That means the amount you are porting to the new home will stay at your existing rate for the rest of the agreed term.

You will still need to pass a new mortgage application with your existing lender, and you will need a new mortgage as well if you are borrowing more than the current value of your existing home loan. But it could still be more affordable overall compared with a new application for the full amount youโ€™re borrowing.

If you secured low rates years ago, and your fixed rate still has time to run, porting may save you a great deal.ย Whatโ€™s more, sticking with your current lender means there wouldnโ€™t be any exit fees to pay.

Can you port your mortgage?

Not all lenders will let you port a mortgage, but it can certainly be a useful tactic to save money if you have one that does. Even if you only have a year or so to run on your fixed rate, it could still mean big savings.

You need to check with your lender. However, even if the mortgage you agreed includes porting in its terms and conditions, there is no guarantee that you actually will be able to move your mortgage. It will all depend on the value of your property and your lenderโ€™s maximum lending criteria.

The decision to lend is always assessed in the same manner as a brand-new purchase application, based on credit score, affordability and property valuation.

If your circumstances such as your income or family situation have changed your attractiveness to the lender may not be what it was and your request to port may be declined.

Are there any disadvantages?

Porting can mean create extra administrative hassle as you can end up with two mortgages from the same lender running on different timeframes, and at different rates. 

Being locked in with your existing lender can mean missing out more suitable deals. If you are borrowing more money, you will be tied to your existing lender and if their current rates are not competitive you could pay over the odds for any additional borrowing required.

Some lenders may lend less in general to borrowers porting their mortgage than to new clients or on a new rate application.

So, should you port your mortgage?

The decision to port an existing mortgage or start again with a clean sheet and a fresh application will ultimately come down to the figures involved.

If you can port your mortgage, and so take advantage of a beneficial rate for longer you may be better off than setting up a new mortgage.

Youโ€™ll need to calculate the costs of your ported mortgage, the costs of any additional borrowing from your current lender โ€“ and compare it with the suitable deals available now.

Those calculations can be best lest left to an expert, and youโ€™ll need the advice of a mortgage adviser who can look at the entire lending market to identify the most appropriate deals available.

Fortunately, the simple way to get the expert help you need is simply to call us at Continuum.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to a particular mortgage strategy and you should seek independent financial advice before embarking on any course of action.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.

You may have to pay an early repayment charge to your existing lender if you remortgage.