Getting the right mortgage for your situation isn’t easy... the right rate, the right term, the right level of monthly repayments – there is a lot to consider.
And that’s before you’ve even applied or been approved.
So once you’ve finally secured a mortgage that works for you, it makes sense that you’d want to keep it.
Keeping your mortgage
What happens then, if after all the effort of getting the mortgage, you want to move house but not leave your mortgage deal behind? For example, imagine that you are couple of years into a very competitive 5 year fixed rate mortgage – and you don’t want to lose it, even though you need to move house for work.
Well, you might not have to. Depending on the terms of your mortgage, you may be able to transfer it to another property.
It’s a process known as ‘porting’, in which you move your current mortgage to your new home. If you keep the loan size unchanged then everything stays the same (repayments, APR, rate) until the end of the term, when you’d be moved onto your lender’s Standard Variable Rate (SVR) or be able to remortgage to a new deal as normal.
How do I port my mortgage?
Although many mortgage deals are portable, not all are so you’ll need to dig out the paperwork for your current mortgage to see if it’s an option for you. It’ll say in the offer letter whether you can port or not.
If you can, you just need to apply to the lender. You may need to pay admin fees to complete a transfer but as you’re not settling the mortgage early, you won’t have to pay an Early Repayment Charge (ERC). Your lender will be able to advise on any fees attached to porting your mortgage.
You’ll need to bear in mind too that although you are not changing your mortgage, just because you’ve been approved for it once before doesn’t mean you’ll automatically get it again – especially if you took out your mortgage a while ago.
The Mortgage Market Review in 2014 saw a tightening up of affordability checks in the mortgage industry. This means that even if you’re applying for the same amount, or less (if you’ve downsized for example), you may still be declined.
Can I borrow more money?
On the other hand, if you’re looking to borrow more, you can still look to port your current mortgage but you’ll need to apply for the excess on a new product. You won’t be able to simply add the excess to your current mortgage.
It’s also worth considering that there may be better value or more suitable products available to you since you took your mortgage out. It might be worth shopping around before you stick with your current mortgage (though you will have to pay fees to exit your mortgage early if you choose to get a brand new product).
We hope that’s helped answer a few basic questions on porting your mortgage. If you’re unsure whether it’s right for you, just book a meeting with your mortgage adviser and they’ll be able to talk through what’s best for you and your circumstances.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.