Before we answer the question, it’s probably worth defining the meaning of ‘porting a mortgage’. Basically, if you already have a mortgage and you want to move house you can either pay off your old mortgage and take out a new loan on the next property (if you need to) or you might be able to take your old mortgage with you to the new property. This is called porting your mortgage.

There are several reasons why porting your existing mortgage loan might be advantageous, especially if you currently benefit from beneficial loan terms. However, just because you might be able to port the loan in principle, there are various reasons why it may not work in practice.

The main issues revolving around mortgage porting relate to changes in circumstances. In other words, either the circumstances of the borrower have changed (e.g. changed job, become self-employed, changes in household income or expenditure) or changes to the lender’s loan criteria (e.g. maximum lending ratio to income, loan to value ratios, etc).

It is well worth doing some maths to establish whether porting your existing loan is attractive anyway. For example, are there better mortgage offers out there? Alternatively, are there any penalties for terminating your existing mortgage early and have you allowed for those costs and any new arrangement fees, etc that might be incurred by you if you settle your existing loan and take out another?

Sometimes, it might be worth porting your existing mortgage and taking an additional mortgage too. This is most likely to be with the same lender as part of a package, although, in principle, having two mortgages on one property is perfectly feasible. Of course, both parties must be aware of the arrangement and it is likely that one of the lenders (the one with the riskiest security) will be charging more for their loan to reflect additional risk.

In conclusion then, whilst porting an existing mortgage can be relatively straightforward in principle, it is critical that you calculate which option is better for you before making a decision. Furthermore, don’t commit to any contractual liabilities until you are sure you have a formal offer in place that suits your needs.

Contact us for further advice on mortgage porting and the pitfalls and benefits to each alternative.

Download our Free First Time Buyers Guide

Recent posts

There was a 32% increase last year in 100% loan-to-value (LTV) mortgages which are mortgages that require zero deposit. According to a recent report by chartered accountants and business advisers, Lubbock Fine, the reason behind this is buyers simply struggling to save enough for a deposit.

Many people are quite private when it comes to what is in their bank account. In this short blog, we look into what Brits have saved by age group.

Research from buy-to-let lender, Landbay, shows that UK landlords are looking at raising rents ahead of the Renters' Rights Bill which is due to come into force this year.

Data shows landlords could miss out on green mortgages due to expired energy performance certificates.

Buying a house is a big deal, and where you are planning to buy will make a difference financially. In this short blog, we look at the most affordable and most expensive areas and how much you need to be earning to buy in there.

Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property's equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.

It’s important to ask questions about the property you are interested in before taking that step to make an offer. A little probing can make all the difference between buying your dream house or something that requires a lot of work.

There are millions of homeowners over the age of 60 who are likely to release money from their homes to pay for their lifestyle during retirement giving those who are 'asset rich but cash poor' a way to live out their retirement the way they wish.