When you are considering the exciting prospect of moving house, it’s natural to question about your existing mortgage. Can you transfer your mortgage to another property when moving home in the UK? You might be wondering whether your current mortgage deal can be ported to your new home, or if you will need to find a new mortgage package entirely. This article aims to demystify the process of porting your mortgage when moving home, including the factors that your lender will consider and the potential fees involved.
What Does It Mean To Port A Mortgage?
The phrase ‘porting a mortgage’ might sound complex, but it essentially refers to the process of transferring your current mortgage rate and deal from your existing property to your new home. It’s a convenient option for those who are happy with their current mortgage or those who don’t want to pay early repayment charges for breaking their mortgage deal early.
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When you port your mortgage, your lender will reassess your financial circumstances, just as they did when you first took out your mortgage. This is to ensure that you are still able to make your mortgage repayments on the new property without any financial difficulty.
Factors Your Lender Will Consider When You Port Your Mortgage
When you choose to port your mortgage, it’s not as simple as just moving your existing deal from one property to another. Your lender will want to reassess your circumstances to ensure that you are still a viable borrower. Here are some factors that they will consider:
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- Your current income and outgoings: Your lender will want to see that you still have a stable income and that your outgoings are not too high. This will show them that you are still able to meet your mortgage repayments.
- The value of your new property: If your new home is more expensive than your current one, your lender will want to assess if you can afford the higher repayments. Similarly, if your new home is cheaper, they may reduce your mortgage accordingly.
- Your credit score: Your lender will check your credit score to see if anything has changed since you first took out your mortgage. If your score has decreased, they may reconsider porting your mortgage.
- The term of your mortgage: If you’re planning to extend the term of your mortgage, your lender will need to consider your age and retirement plans to ensure that you will be able to make your repayments.
The Cost of Porting Your Mortgage
While porting your mortgage can often be a cost-effective option, especially if you have a particularly good deal or if you will face high early repayment charges for breaking your current deal, it’s not always without fees.
Certain costs are involved in porting a mortgage. You may be charged a porting fee by your lender, which could be a percentage of your mortgage balance or a fixed fee. You may also have to pay for a new valuation on your new property, as well as legal costs for transferring the mortgage.
Remember that if your new home is more expensive and you need to borrow more money, this additional borrowing will typically be at a higher rate than your existing deal. This could make your monthly repayments significantly higher.
Finding the Best Deal When Moving Home
If you find that porting your mortgage isn’t the best option for you, then you’ll need to find a new mortgage deal for your new home. You can either do this with your current lender or look for a new lender altogether.
When looking for a new mortgage, it’s important to compare the whole market to ensure you get the best deal. Look at the interest rate, any fees involved, and the overall cost of the mortgage over the term. Also, consider the flexibility of the mortgage, such as the ability to make overpayments or take payment holidays.
Remember that when you move mortgages or lenders, you may have to pay an early repayment charge on your existing mortgage. This could be a significant amount, so it’s important to factor this into your decision.
In the end, the key is to do your homework and compare all your options. Whether you port your mortgage or find a new deal, ensure that it’s the right decision for your specific financial circumstances and future plans.
The Process of Porting Your Mortgage
Before you can transfer your mortgage to your new property, you need to understand the process of porting a mortgage. It all begins with contacting your lender to discuss your plans. Your lender will then reassess your financial circumstances, just as they did when you first took out your mortgage. This reassessment includes checking your income, outgoings, credit score, and evaluating the value of your new property.
After evaluating your financial status, your lender will then decide whether to approve your mortgage porting request. If approved, the next step involves paying any associated fees, such as a porting fee, valuation fee, and legal costs. Remember, if your new home is more expensive and you need to borrow more money, the additional borrowing might attract a higher interest rate than your current deal. This could significantly increase your monthly repayments.
In the event your lender does not approve your porting request, you may have to consider finding a new mortgage deal or even a new lender. This will likely involve paying an early repayment charge on your existing mortgage. Therefore, you need to factor in all these considerations when deciding whether to port your mortgage.
Conclusion
The question of whether you can transfer your mortgage to another property when moving home in the UK is not a straightforward ‘yes’ or ‘no.’ The ability to port your mortgage largely depends on your lender, your current financial circumstances, the value of your new home, and whether you can afford any additional costs involved.
Porting your mortgage can be a cost-effective option, especially if you have a desirable mortgage deal or if an early repayment charge on your current mortgage would be high. However, it’s not always the best choice for everyone. It’s crucial to thoroughly assess your financial situation, consider all available options, and seek professional financial advice if necessary.
In the end, whether you decide to port your mortgage or find a new mortgage deal for your new home, ensure the decision you make is the best for your specific financial circumstances and future plans.