Porting your mortgage allows you to transfer your current mortgage deal to a new property, helping you avoid early repayment charges (ERCs) and keep your existing interest rate. Here’s what you need to know:
What is Mortgage Porting?
Mortgage porting involves moving your existing mortgage from one property to another without paying it off or taking out a new loan. It’s typically available with fixed or tracker mortgages, depending on the lender.
Understand the Benefits and Drawbacks of Porting
Before deciding to port your mortgage, it’s important to weigh the pros and cons:
Benefits:
- Avoid Early Repayment Charges (ERCs): If you have a fixed-rate mortgage, porting allows you to avoid paying ERCs, which could be substantial if you break your mortgage early.
- Keep Your Current Interest Rate: If you have a great deal, porting your mortgage allows you to keep the same interest rate, which may be lower than the current market rate.
- No Need to Reapply for a New Mortgage: Porting your mortgage means you don’t have to undergo the full mortgage application process again, potentially saving you time and fees.
Drawbacks:
- Approval Is Not Guaranteed: Lenders will assess your new property and financial situation, and approval for porting is not automatic.
- Additional Borrowing May Be Needed: If the new property costs more than your current home, you may need to borrow additional funds at a higher interest rate.
- Not All Mortgages Are Portable: Some mortgage deals may not allow you to port your loan, so it’s important to check with your lender or mortgage broker.
Step 1: Check if Porting is Possible
- Review Your Mortgage: We will check your current mortgage is portable. Fixed-rate and tracker deals are usually porting-friendly, but not all mortgages allow this.
Step 2: We Will Assess Your Financial Situation
- Loan-to-Value (LTV): Ensure your new property meets your lender’s LTV requirements.
- Affordability: Lenders will assess your ability to afford the new mortgage based on your income and expenses.
- Additional Borrowing: If your new home costs more, you may need extra borrowing at a potentially higher rate.
Step 3: Apply to Port Your Mortgage
- Submit Application: We will inform your lender of your intention to port your mortgage and provide details of your new property.
- Valuation: Your lender will likely require a valuation of the new home.
- Approval: The lender will review your financial situation and approve or decline the porting request. This is a similar process to if you were buying the home with a new lender.
Step 4: Finalise the Process
- Sign the Agreement: Once approved, you’ll sign the new mortgage agreement, which will outline the terms of your ported loan.
- Move In: The mortgage funds will be used to pay off your current home loan, and your new property purchase will be completed.
Step 5: Begin Repayments
Your repayments will continue as before. If you borrowed additional funds, your payments may increase, but your terms should remain similar to your original deal.
Additional Considerations
- Timing: Porting your mortgage can take time, so it’s important to start the process early. This is particularly crucial if you’re in the middle of a fixed-rate deal.
- Special Conditions: Some mortgage deals come with specific conditions regarding porting, such as limits on the amount of time you can delay the move or restrictions on the properties you can port to. Be sure to review these with your lender.
- Porting Fees: Some lenders may charge administrative or valuation fees during the porting process, so check with your lender for any potential costs.
Why Use a Mortgage Broker?
Porting can be complex, but we’re here to help. We will:
- Ensure porting is the best option for you
- Guide you through the application process
- Compare alternative deals to make sure you get the best terms
Contact us today to see if porting your mortgage is right for you!
Emily's Mortgage Services LTD 