While buying a home generally means that you expect to live there for a long while, if not permanently, there’s no avoiding the fact that plans change.
In some cases, you may find that you want to move house before your mortgage term is up, but the good news is that it’s usually entirely possible to move house even if you’re tied into a particular mortgage deal on your current property.
In this article, we explain the two main ways to do this – ‘porting’ your current mortgage or getting a new mortgage altogether.
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Can I transfer my mortgage to another property?
If you want to move house but keep your current mortgage then most lenders allow you to transfer your mortgage from one property to another. This is known as ‘porting’ your mortgage.
Not every mortgage deal is portable, however, so you should check in your contract or with your lender directly if porting your mortgage is something they’ll allow.
If you do decide to port your mortgage, you’ll effectively have to re-apply for it, which will include proving that repayments are still affordable. Just because a mortgage can be ported doesn’t mean your lender has to let you transfer it to your new home, and if your financial circumstances have changed – for example, if you have had children or changed jobs – or if your lender’s affordability criteria have become stricter, then you could still be refused.
If your lender does accept your application to port your mortgage, you’ll usually have to pay for a valuation of the new property, conveyancing fees, and of course Stamp Duty. However, you shouldn’t have to pay an arrangement fee for the mortgage as you will have done that (or added it to your mortgage) when you first signed up for your deal. You also don’t have to worry about early repayment charges or exit fees either, since you are not leaving the mortgage or repaying it early.
The main advantage of porting your mortgage is that, if you are happy with your current interest rate, you can simply carry on paying it on your new home instead of having to seek out a new deal.
Can I port my mortgage to a more expensive property?
Porting your mortgage can get a bit more complicated if the value of your new home is higher than that of your current one, as it means your existing loan won’t be enough to cover the cost of the new property. If you can’t meet the difference with savings, you will have to ask your lender if you can borrow more.
One possibility in this situation is that your lender simply lets you increase your mortgage as part of the porting process, but you may find the rate you arranged your current mortgage at is no longer available.
This means you’ll usually have to take out a second mortgage from your lender, so that the cost of the new property is split between your current mortgage deal and the new one. This means that in addition to porting the old mortgage, you will also have to apply for a new one for your additional borrowing, which may involve paying a new arrangement fee. You’ll have to stay on top of two different mortgage payments each month too, which can be a hassle, with the interest rate on the second mortgage likely to be higher than your initial one given that there have been several increases in the Bank of England base rate since 2021.
When both mortgage deals finish, you may then decide to remortgage both loans into one. This will save you from having to keep track of two mortgage payments every month.
Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
Can I port my mortgage to a cheaper property?
If you have paid off some of your current mortgage and are looking to downsize to a cheaper property, then porting your mortgage can be an attractive option here as well. Theoretically, since there will now be a difference in value between your home and the loan you have taken out, you will even be able to pocket the difference.
However, you will need to factor in how moving into a cheaper property with the same mortgage from a more expensive one affects your loan-to-value ratio (LTV).
For example, if your current property is worth £400,000, and you have a mortgage for £300,000, your LTV will be 75%. If you then move to a property worth £350,000 but keep the same loan, your LTV will be closer to 86%. Since lenders tend to offer better interest rates to those with lower LTVs, they might refuse to offer you the same rate, or ask you to pay off a chunk of the mortgage upfront so that the LTV stays the same in order to keep your rate.
Can I get a new mortgage to move house?
Sometimes, porting your mortgage is simply not an option that will work for you. In this case, you may instead need to use the proceeds from the sale of your current property to pay off your existing mortgage and take out a new mortgage altogether on the new property – in other words, to remortgage.
Remortgaging instead of porting your existing mortgage when you move house can actually be beneficial if there are better deals on the market than your current rate.
The downsides of remortgaging are that you’re likely to have several fees to pay. You’ll have all the associated fees of the new mortgage (arrangement, valuation, conveyancing) while also being hit with an exit fee for leaving your current mortgage, although some remortgage deals offer a free valuation and free legal fees. If you are still within your current mortgage’s fixed rate deal, you will also have to pay an early repayment charge (ERC) to settle this, which is typically 1-5% of the remaining debt, depending how long you have left on the deal. Read more in our article Mortgage fees and costs explained.
Should I port or remortgage?
Ultimately, whether it’s better for you to port your current mortgage or look for a new deal altogether will come down to a few factors:
How good is my current deal compared to alternative mortgage deals?
The main benefit of porting your mortgage is that it allows you to take an attractive rate over to a different property, which can even be worth the trouble of getting a second mortgage on top if necessary. But if you’ve moved onto your lender’s SVR, or there are better fixed-rate deals on the market, you’re likely to be better off leaving your current mortgage behind with your old house.
Will my lender let me port my mortgage?
While a mortgage deal may be billed as portable, there are no guarantees that your lender will actually let you move it across to your new property. This is because you still need to meet the lender’s criteria in order to port your mortgage, and could still be refused, for example because of a change in financial circumstances, or because the new property is significantly more expensive than your current home.
How do the fees compare?
As mentioned, if you decide to leave your current mortgage early you’ll often be saddled with a hefty early repayment charge if you are still in the midst of the introductory deal. You should work out how much these would be before you consider remortgaging over porting.
You’ll also have to pay all the associated fees for sorting out a new mortgage, including arrangement fees, valuation, and conveyancing.
Bear in mind that while porting your mortgage does away with some of these fees, you’ll still have to pay for valuation on the new property, as well as conveyancing if you are getting help from a legal expert. Plus, if you end up needing a second mortgage on top of your existing one, you’ll have to pay the arrangement fee on this loan anyway.
You may not be able to calculate all of these fees upfront, but you should at least be able to find out how much it will cost you to leave your current mortgage.
Will I need to get a second mortgage?
As mentioned previously, it may be the case that, when moving to a more expensive property, unless you have savings available, you’ll need to take out a second mortgage on top of the one you are porting in order to cover the difference in cost. Crucially, this second mortgage may bear a less attractive interest rate than the one you’re porting.
It may be that you are better off remortgaging altogether and forking out for repayment charges, so you can just take out one loan on the new property, instead of having to balance two different mortgages at the same time.
Make sure you have looked at the terms of your current mortgage in detail and done the maths before you commit either to porting your mortgage or remortgaging. Once again, getting expert mortgage advice can be really useful in these circumstances.
If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
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