Porting a Mortgage

Porting a Mortgage – Generally these days most mortgages tend to be ones that are portable. Portable means that it is often possible to transfer a mortgage from one home to another if you’re moving home, without a penalty. Ideal if you are in the middle of a fixed rate and decide you want to move.

Not all mortgages are portable

Not all mortgages are however portable though, so you should check with your Lender or Broker before putting your house on the market to clarify. If you have an older mortgage or if it is with a specialist lender there is a chance it might not be portable.

Porting a Mortgage to a More Expensive Property

Some customers decide not to affect the porting option even when it is available to them. There are several potential reasons for this. Maybe the new Lender will not lend them the extra money they need to fulfil the move. You may be surprised to know that the lender will still need to review your current circumstances, with many lenders it’s almost the same as if you were making a brand new application. When you port a mortgage there is a restriction in that it is only possible to port the amount currently owed. Any additional borrowing needs to be from the deals currently available from the lender’s range and might not be competitive.

If you do port a mortgage and borrow extra monies, the additional borrowing creates something called a “sub-account”. In other words, you have one mortgage but with two different rates of interest applying to it. This can be a real pain because almost certainly the two products will “overlap” each other and as such it’s difficult to get these to line up without having to let one drift onto the standard variable rate for a while. Customers tend not to like having to change their mortgage deals as often as this and some of them decide to take the “hit” and pay an early repayment penalty to swap Lender and get it all lined up.

Is porting my mortgage right for me?

Porting a mortgage is more difficult than it sounds in some cases and you would be wise to enlist the help of a local Mortgage Broker for their opinion on the options.

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