When moving home you face the dilemma of whether to take your existing mortgage with you or get a brand-new deal – but the choice may not always be yours.
When many of my friends who come to Mortgages Remortgages – Fee Free Mortgage Advisor ask about how do I move my mortgage as I’m moving house, I tell them it’s not as complicated as you may think! – Stephen Kerrigan, Mortgage Advisor of Doncaster.
If you’re moving home you face the dilemma of whether to take your existing mortgage with you or get a brand-new deal – but the choice may not always be yours.
This guide explains the process of porting a mortgage, whether you’re likely to be able to do it and if it’s the right option for you.
Many mortgages are ‘portable’, which means you may be able to transfer your current mortgage product to a new property. Even if your mortgage is portable in theory, however, you may still be blocked.
Porting is a great flexible feature but there are no guarantees your lender will actually permit you to do it – and you could end up borrowing at an uncompetitive rate to boot. Here’s why…
When you ask your lender to ‘port’ your mortgage, you effectively have to re-apply for that deal. So, you may not qualify as it is much tougher to get a mortgage now than it used to be. You may struggle if circumstances have changed, eg, you’re now self-employed, you earn less or you have more debt and/or outgoings.
Or you might not have changed at all but your lender’s criteria has, so even though you got your first mortgage without hassle, it doesn’t mean the same will happen again. And if you haven’t made all your mortgage payments on time, chances are the lender will refuse in the hope you leave them.
If you move to a more expensive property, as many people do if they’re looking for a bigger home, you may need to borrow additional cash. If it is willing to lend, the lender may insist that the additional borrowing goes on another mortgage product, which is likely to involve an arrangement fee and probably a higher rate.
If you do end up on two mortgage products and their initial periods finish on different dates, be aware you may revert to a high rate on the one that ends the earliest.
If you move to a more expensive property, you may need to borrow more cash but your lender may not allow this if you are already close to the maximum it will lend you.