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What is Porting?
If you are moving home, most lenders are able to transfer your mortgage to the new property without the need for you to take out a new mortgage. This is called porting your mortgage.
Porting your existing mortgage requires a new mortgage offer, so even though you’re staying with your existing lender, you’ll go through the mortgage application process again. This means that valuation fees, stamp duty and other fees you paid on your first mortgage, will be due again. As it’s treated as a new application, you can be refused, particularly if your financial situation has deteriorated.
Some lenders will allow you to leave your current mortgage deal early without paying an early repayment charge, if you choose to port your mortgage, but this will not always be the case. Each lender will have their own criteria and your broker will be able to advise you about your options.
Can I increase my loan amount when I port?
If you choose to move to a higher value home and need to increase the loan amount, you can ask your lender to increase your mortgage. This will be treated as a new application, however, so you will need to meet the affordability criteria and prove that you can afford the higher repayments on your mortgage.
Each lender will have different criteria and whilst some might allow you to increase your current loan, others will insist that you take out another mortgage to pay for the additional loan requirement. This could have a different mortgage rate and terms to your original mortgage.
Can I decrease my loan when I port?
If you decide to downsize, then porting your mortgage is still an option, but you may need to repay the difference between your existing loan and smaller loan to the lender. Most lenders will allow for a decrease in loan of up to 10% of the original loan before you are charged a fee, but this will vary from lender to lender.
How do I know if porting is right for me?
This will depend on a number of factors, for example, some lenders will not offer a porting option, in which case remortgaging would be your only choice. If you are close to the end of your existing mortgage, it might be quicker to consider changing lenders.
As all lenders porting options will vary, it’s best to contact them to find out what your options are. A mortgage broker can also provide guidance on deciding your best option, based on your individual circumstances.
If you can’t or decide not to port your mortgage, you have the option to either do a product transfer with your existing lender or consider remortgaging with a new lender. Transferring to a new mortgage product with your current lender will not necessarily mean that you avoid paying early exit fees.
In order to benefit from remortgaging, choosing the right time is very important. In some circumstances, such as if you only owe a small amount on your existing mortgage or the exit fees are very high, the remortgage fees will outweigh any financial benefits.
Does the value of your current or new home affect your options?
Upsizing to a higher value home will always be more challenging than downsizing, unless your home has risen in value. If you have Negative Equity, however, it’s unlikely that any lender will allow you to remortgage or port your mortgage (you owe more than its current value). There are a few extenuating circumstances, however, such as if you need to relocate for work.
How a Mortgage Broker can help find you the most appropriate deal
IMS Mortgage Brokers can help to find you competitive mortgage deals that you won’t find on the open market. We can help you decide whether Porting or Remortgaging is a more suitable option for you, based on your individual circumstances and lender.
We can take much of the administrative burden from your Home Mover Mortgage, saving you time, stress and money.