A change of city, a move to the countryside or more room for that poor cat you keep swinging: there are lots of reasons to move house, but what if you’re tied into your current mortgage deal? Can you take your existing deal to your new property? Thankfully most mortgages are portable, which means you should be able to move your current deal to your new home.
Okay, good. How?
When you start planning to up sticks it’s a good idea to call your lender to discuss how porting your mortgage will work.
It is usually a fairly simple application, but the lender will need to value the new property to check they are happy to lend on it. If you need to borrow more, then your lender will want to check that you can afford the higher repayments.
Typically, there will be a fee of a few hundred pounds to pay if you want to transfer, so it’s a good idea to check with your lender early on so you can factor the cost into your budget.
Why should I port my mortgage?
If you’re not tied into a mortgage deal then it’s likely to be to your advantage to look for a new mortgage deal that is suited to your individual needs. In that case you could speak to an adviser or broker and compare different mortgage offers online.
However, if you’re still tied into a deal – or if your current deal is so good that you want to keep it – you can ask to transfer it to your new home. That means that you’ll continue to be charged the same interest rate and all existing terms and conditions will continue to apply, including the product end date. For homeowners with a mortgage with early repayment charges, porting can often be the only way to avoid any fees for breaking the terms early.
Early repayment fees vary but they can be as high as five percent of what you owe, which can come to thousands of pounds. Make sure you check what fees would be payable before you leave your lender.
What if I need a bigger mortgage?
Chances are you’re moving because you need a bigger home. Maybe you’ve had children or are planning to, or maybe you’re earning more and want to reward yourself with a bit more space. Whatever the reason, you’ll need to apply for the extra borrowing and meet your lender’s eligibility criteria.
Since 2014 lenders have been subject to new affordability rules when increasing borrowing which are much tighter than before. You will need to provide information on your income and outgoings, including things like car payments and childcare. If you’re not 100 per cent sure your mortgage provider will agree to more lending then it’s a good idea to check with them before paying for any surveys on the home you want to buy.
What if I want to switch mortgages?
If you’re not locked into a fixed deal then moving home could be a good time to switch mortgage providers in search of a more competitive rate. This is particularly important if you’re moving to a larger house and face larger monthly payments, you’ll want to be on the best product to suit your circumstances.
As long as you’re not locked into a product then this should be treated like a standard mortgage application.
If you’re locked into a deal and your lender won’t agree to extra borrowing but another lender will, then paying the early repayment fee might be the only way to finance your new home.
So start your warmup and warn Mr Tiddles: porting your mortgage is possible and there may be some serious cat swinging in your future.
Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.