Can you take your mortgage with you when you move to your new home?
Are you thinking about buying a new home and wondering whether you can keep your mortgage? By porting your mortgage, you do not have to look for new mortgage products, and you can take your existing mortgage with you to your new home.
Why might you want to port your mortgage?
The most significant advantage of porting your mortgage is because you will not have to go through the trouble of finding a new deal and can continue on the current mortgage rates which have a low-interest rate, early repayment charge, or both.
How does porting work?
In practice is not different from switching to another mortgage.
When you sell your home, you will first pay off the lender and redeem your mortgage. However, you will have to file another mortgage application. You are merely asking your mortgage lender to lend to you again.
The mortgage lender will have a mortgage valuation survey carried out. This survey is to determine whether the property you want to buy is an excellent property to lend against.
You must not confuse this valuation survey with a survey which checks the condition of the property.
Will you get approved by the lender?
Mortgage lenders can refuse to allow you to port your mortgage if you do not meet their affordability criteria. Since the Mortgage Market Review Rules were introduced in 2014, some banks have made their lending criteria stricter.
Can you borrow more money?
You will not be able to add to your existing loan. You will have to apply separately for another mortgage if you want to borrow more money, and then two rates will be blended.
It will also be a good idea if you try to overlap the two mortgage deals. It will mean that you can look for a new deal for the whole amount without having to pay an early repayment charge.
What happens if your porting application is rejected?
It would help if you asked the lender to review their decision. However, if you think you have not been treated fairly by the lender, then you can approach the Financial Conduct Authority and the Financial Ombudsman Service.
What will happen if there is a delay between selling your home and buying a new one?
Most lenders provide a grace period of up to 30 days if the sale and purchase do not happen simultaneously. However, if the delay is longer, then you should expect that the seller will not allow you to port your mortgage. You can opt for a new deal in that case, and due to this the lender is likely to waive off the early repayment charge.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
We would love to hear what you think about this article and how we could improve it. Please do let us know. However, we shan't be able to reply to your specific questions. If you have a question about a document, please contact us.
If you have noticed a bug or a mistake on this page, or just want to give us feedback, we'd love to know. Nothing is too small or too big. Send your message on this feedback page.