Porting Your Mortgage
Porting means transferring the mortgage on your current property to a new property that you want to buy.
Why port your mortgage?
The greatest advantage of porting your mortgage is that you will not have to go through the trouble of finding a new deal. If your current mortgage is favourable in terms of having a low interest rate or no early repayment charges (or both), you can keep those benefits when you port.
How does porting work?
In practice, porting is not very different from switching to another mortgage product.
Normally, when you sell your home, you repay the lender from the sales proceeds and redeem your mortgage. If you are part-way through a fixed interest product, you may have to pay early redemption fees.
When you buy your next property, you apply for a new mortgage. This is treated as a new lending agreement and is likely to arrangement fees to pay.
The mortgage lender then will carry out a mortgage valuation survey to determine whether the property you want to buy is appropriate to lend against as security.
With porting, you transfer your existing mortgage product. There are no early redemption fees (because you're not redeeming the mortgage) and there are no arrangement fees (because you're not arranging a new loan). There may be a porting fee, but is likely to be much less than the redemption and arrangement fees combined.
The lender is still likely to carry out a valuation survey.
Will you get approved for porting by your 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.
You can also overlap the two mortgage deals. 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, 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.
If you enter into a new mortgage with the same lender, that lender may waive some or all of the arrangement fee.
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.
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