Guide To Porting Your Mortgage
Thinking of moving home but want to keep your mortgage? You don’t have to look for a new deal; you can take your existing mortgage to your new home. Most mortgages can be transferred from one property to another. Here’s what you need to know about porting your mortgage.
Benefits of porting your mortgage
Most borrowers opt to port their mortgage because they are either on a deal with a low interest rate or have a product with an early repayment charge.
Early repayment fees are usually between 1% and 5% of the outstanding debt depending on how long you have left of your intro deal, meaning you could be left with a hefty bill.
You will have to reapply
When you ask your lender to port your mortgage, you effectively have to re-apply for that deal. Nowadays, lenders have much stricter affordability requirements, so if you don’t meet their current criteria, you may not qualify.
What if you need to borrow more?
If you move to a more expensive property, you may need to borrow additional cash. If your lender is willing to lend you more, they may insist that you apply separately for the extra amount, which is likely to involve an arrangement fee and probably a higher rate.
If you do end up with two mortgages and their initial periods finish at different times, be aware that you may revert to a high rate on the one that ends the earliest.
What if my lender won’t allow it?
You can speak to your lender and ask whether they can review their decision, but don’t bank on them changing their mind. If you think you’ve been treated unfairly by your lender, get in contact with the Financial Conduct Authority and Financial Ombudsman Service.
If neither of these options work, your last option is to find another lender, but you could potentially face large fines.
What if there is a delay between buying and selling?
If the sale and purchase doesn’t happen simultaneously, most lenders offer a grace period of up to 30 days. If the gap is longer, you may be unable to port your current deal. However, if you opt for a deal with the same lender, they may refund the early repayment charge.
There you have it; everything you should know about porting your mortgage. If you have any further questions, don’t forget to connect with us on Facebook.
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