Porting your mortgage is buying a new home but keeping your existing mortgage deal and rate.
It’s important to note that porting is not a transfer of the mortgage loan, it’s a transfer of the mortgage product/deal. If you are not looking to borrow any more, you will not need to reapply. However, if you need to borrow more to fund the purchase of your new home, or for home improvements, you will need to apply for a new mortgage loan. You should always check with your lender, as some mortgage products may not be portable. Porting may be a preferable option if you have a competitive rate you could not replicate in current market conditions.
Different types of porting
Partial port:
Borrowing less than the amount on your existing mortgage is known as a partial port. This means you can port part of the balance on your mortgage product, and the difference must be repaid on completion of the new loan. An early repayment charge may apply, depending on the amount you are looking to repay on your mortgage product. An early repayment charge is a charge for paying off your mortgage early, remortgaging to another lender before your current mortgage product end date, or repaying more than the maximum amount allowed.
Like for like:
Borrowing the same amount on your existing mortgage, where the term is the same and doesn’t require any other changes or new borrowing.
Additional borrowing:
If you need to borrow more than your existing mortgage, this is known as porting with additional borrowing. For the outstanding amount, the ported interest rate does not apply, and you would need to choose a new mortgage product to cover it.
How do you port a mortgage?
You will need to check you can port your mortgage. Not all mortgage deals are available to port. If you choose to port your current mortgage, you will need to go through a new mortgage application. When applying for a new mortgage, lenders will look at the following:
Can you afford the repayments? If you are looking to borrow more money, your repayments will be different compared to your existing repayments. Your lender will check if you can afford the new mortgage repayments.
Is the property suitable? Depending on where the new property is located, can determine if this fits your mortgage lenders criteria. At the Tipton, we will consider lending on properties across England, Wales and the Isle of Wight.
Houses, bungalows, flats and maisonettes must have a minimum value of £100,000, or £250,000 if located within the M25 corridor. Properties with an annex will be considered on an individual basis. We will also look at the tenure of the property and the following is considered as suitable tenure for security purposes: freehold (excluding flats or maisonettes); flying freehold (maximum 15%); leasehold (there must be at least 85 years remaining on the term at application and at least 60 at the end of the mortgage term); and commonhold.
Your lender will also review your circumstances to see if anything has changed with your finances or household income, the loan to value of your new mortgage, and check to see if it fits their lending criteria.
What are the benefits of porting your mortgage?
If you are looking to port your mortgage, you can consider some of the potential benefits below:
- If your initial mortgage rate is lower than the current market rates, you will carry on paying that low rate at your new property until the end of your product term; and
- When porting your mortgage you will be able apply to borrow more money for example if you are looking for additional borrowing for home improvements.
What are the disadvantages of porting your mortgage?
If you are looking to port your mortgage, it is also important to consider some points which may be a disadvantage:
- If your initial mortgage rate is higher than the current market rates, and you don’t do any research before you port your mortgage, you could be losing out on a lower rate of interest.
- If you are borrowing more money this may change the terms of the mortgage.
- Add reference to having sub accounts or multiple products with different end dates
Speak to our Mortgage Advisers
If you are considering porting your mortgage, our Mortgage Advisers are here to help you through your journey. You can call to speak to our mortgage advisers on 0121 557 2551 or complete our online contact form and one of our advisers will get back to you.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.