Porting Your Mortgage: What Is It And How Does It Work?

Moving to a new home doesn’t necessarily mean starting over with your mortgage. If you’ve secured a favourable interest rate or mortgage terms that you’d rather not lose, mortgage porting could be your solution.

In this article, we explain what mortgage porting is, how it works, who qualifies, and its pros and cons so you can decide whether it’s the right choice for your next move.

What is a Porting Mortgage?

Porting your mortgage means transferring your current mortgage deal from your existing home to a new one, keeping the same mortgage balance, interest rate, terms, and conditions.

With porting increasingly common these days, clients often ask, “How easy is it to port a mortgage?” It’s usually easiest when the loan amount needed for your new home matches your current mortgage. Although it is possible to increase the loan amount (top up), this additional borrowing will be at a different rate and with different conditions.

Your lender will treat the porting request like a new application, so approval isn’t automatic. You’ll need to meet their criteria, just as you would to qualify for a new loan.

How Does Porting Your Mortgage Work?

It’s important to understand that a porting deal must go through the lender’s formal assessment and approval process. Here are the broad steps involved:

1. Lender approval: You need to apply with your current lender to port your mortgage. This should be done as soon as you decide to move but after you’ve spoken to a mortgage advisor to assess your options.
2. New property valuation: Your lender will arrange a valuation of the new property to ensure it meets their lendingrequirements and risk appetitie.
3. Affordability assessment: The lender will require details of your current income, expenses, property costs, and credit score to confirm you can afford the loan on the new property.
4. Meeting conditions: Approval will depend on several conditions, including your current loan size, credit history, and the time remaining on your mortgage deal.

The lender’s decision is discretionary, and just because the mortgage is portable, it doesn’t mean it will be approved. Check out our Mortgages for Moving House page  for more information and key considerations.

Pros and Cons of Porting a Mortgage

To help you weigh your options, let’s break down the key benefits and drawbacks.

Benefits of porting your mortgage

• Avoid early repayment charges: If you’re on a fixed-rate or other deal with an early repayment charge, porting helps you save money by avoiding this cost.
• Keep a favourable interest rate: Retaining your existing mortgage rate is often the biggest advantage, especially in a climate of rising interest rates.
• Simpler process: By staying with the same lender, the process of porting is usually less complicated than starting from scratch with a different lender with different criteria.

Drawbacks of porting

• Needing two loans: If your new property costs significantly more than your present one, you may need to borrow more than your current mortgage balance (top up). Most lenders will offer this as a second, separate loan with potentially a higher interest rate.
• Strict lender criteria: You must re-qualify for the loan based on your current financial position. This could be a hurdle if the rules are tighter, particularly if your finances have worsened.
• Missing out on better deals: Since porting restricts you to your current lender, you may miss out on more competitive rates or terms from other lenders.

Is it a Good Idea to Port Your Mortgage?

Porting can be a great option if:

• You’re on a low fixed existing rate that’s hard to beat.
• You’re current lender allows you to port your exisiting mortgage.
• You face high early repayment charges if you pay off your current loan to take a new one.
• You are happy to stay on your exisiting deal with the current terms.

However, it might be better to redeem your current loan and apply for a new one if:

• Your financial situation has changed recently.
• You are downsizing and early repayment charges still apply due to the amount you are redeeming.
• You want access to better rates or more flexible terms.
• You have low or no early repayment charges.

How to Qualify for Porting a Mortgage?

Every lender has their own rules, but in general, the qualifying criteria are:

• Stable or increased income: You must prove that you can afford the new mortgage (plus additional borrowing if required).
• Property value: The new home must meet the lender’s criteria requirements.
• Good credit score: A clean credit history is vital.
• Clean payment history: Your current mortgage should be completely up to date with no recent missed payments.

Planning to Port Your Mortgage? Speak to a Mortgage Advisor

Porting can be a smart way to keep your current deal and the same rate when moving home, but it’s not the best option for everyone.

Speaking with a qualified mortgage advisor can help you decide whether porting  or applying for a new mortgage best suits your goals and circumstances.

Our experienced, friendly mortgage team is always ready to offer clear, tailored advice with no pressure to make hasty decisions. At Flagstone, we’re independent mortgage advisors with access to the entire market. We simplify the maze of lender rules, fees, and criteria to find the best deals for our clients.

Contact us today to explore your mortgage options and make your move as smooth as possible.

FAQs

Is there a penalty to port a mortgage?

There’s usually no penalty for porting itself. However, you should expect costs such as valuation, legal, and arrangement fees.

Can you port a mortgage without selling your home?

In some cases, you can port a mortgage without selling your home. You’ll need to discharge the old mortgage using other funds, but it’s not standard practice and depends heavily on your lender’s policies.

Can a bank refuse to port a mortgage?

Yes, lenders can refuse to port a loan. The product might not qualify for porting, or you might not meet their current affordability requirements. You will also be refused if the new property doesn’t meet the lender’s criteria (e.g., non-standard construction, low valuation, or outside LTV limits).