If you’re thinking about moving to a new home in Derby, you might wonder whether you can take your current mortgage with you.

This process, known as “porting a mortgage,” allows you to transfer your existing mortgage terms to a new property.

For some, it’s an effective way to keep their existing mortgage rate, especially if it’s lower than current rates.

Understanding How Porting a Mortgage Works

Porting a mortgage means that you stay with the same lender and retain the terms of your existing mortgage deal.

While it sounds straightforward, porting a mortgage still requires approval, similar to a new mortgage application.

Your lender will assess whether you meet their affordability and credit criteria for the new property.

If your financial situation has changed since you took out your original mortgage, or if the new property has different attributes (such as a higher value or unique features), this could influence your lender’s decision.

In some cases, homeowners moving home in Derby to a more expensive property may need to “top up” their mortgage with additional borrowing.

This might mean a portion of your loan will be subject to current market rates, which could be higher than the original rate.

If this happens, you’ll have two mortgage rates on your loan, which could affect your monthly payments and overall costs.

Fees and Considerations

When porting a mortgage, it’s important to be aware of potential fees.

Some lenders may charge an administration fee for transferring your mortgage to the new property.

Additionally, if your move requires you to borrow extra funds, this might incur new arrangement fees for the additional borrowing. It’s always a good idea to check with your lender regarding these costs before making a decision.

If you’re on a fixed-term mortgage, leaving it early can sometimes trigger early repayment charges (ERCs).

If you’re porting to a new property within the same loan agreement, your lender may waive or reduce these charges, but it’s best to clarify this with them to avoid surprises.

Is Porting Right for You?

Porting your mortgage can be an attractive option if your current rate is competitive and you want to avoid the costs of breaking a mortgage agreement.

It’s wise to compare this option with current deals, as market changes could mean better rates are now available.

Speaking with a mortgage broker Derby could be a valuable step. They can guide you through the details, help with paperwork, and support your financial decision.

Date Last Edited: November 14, 2024