If you're moving home, your mortgage probably isn't the first thing on your mind.
You're thinking about viewings, solicitors, removal vans and whether the buyers and sellers beneath you are going to hold the chain together. Your mortgage feels like something you'll sort out when you need to.
Then, someone asks whether you're planning to port it or get a new one. Suddenly, you're staring at a decision you hadn't really thought about. It's an important question, and the answer isn't the same for everyone. This blog explains what you need to know.
What does 'porting' a mortgage mean?
'Porting' means transferring your existing mortgage deal to your new property, keeping the same interest rate and the same lender, but applying it to a different home. It sounds straightforward, but there are a few things worth knowing before you assume it's the best option for you.
First, even though you're keeping your deal, you'll still need to apply to move it to your new home. Your lender will reassess your affordability from scratch, so any changes in your income, outgoings or credit profile since you took out your original mortgage could affect whether they'll agree to you porting it.
Second, if you're borrowing more on the new property than you owed on the old one, the additional amount usually goes on a separate mortgage, at whatever rate your lender is currently offering. That means you could end up with two mortgages running parallel, which isn't necessarily a problem, but it is something to factor in.
And third, not all mortgages are portable. It's worth checking your mortgage terms before you build any plans around it.
When porting makes sense
The most common reason to port a mortgage is to protect a rate you'd rather not lose. If you fixed at a low rate a year or two ago and rates have since risen, walking away from that deal could cost you more each month. Porting lets you hold onto it.
Early repayment charges (ERCs) are another major factor. If you're partway through a fixed-rate or tracker deal, leaving it early can trigger a charge worth thousands of pounds. Porting typically avoids that.
It can also make sense when your borrowing needs on the new property are similar to what you currently owe. If the top-up you need is relatively modest, the rate on your existing mortgage plus a new rate on the additional amount might still work out favourably for you.
The key word throughout all of this, though, is might. Porting is worth serious consideration in the above scenarios. But whether it's the right call for you will depend on the numbers in your specific situation.
When a new mortgage makes more sense
If your current deal is close to its end, or has already ended, there's usually little reason to port. You're not protecting anything meaningful, and a fresh application for a new homemover mortgage will give you access to the full market rather than just what your existing lender offers.
The same logic applies if interest rates have shifted in your favour since you took out your original deal. A whole-of-market broker, like FG & Cook, can tell you quickly whether switching would leave you better off.
Borrowing significantly more on the new property is another scenario worth thinking through carefully. Running two separate rates, your ported deal and a new one on the additional borrowing, can produce an awkward split that doesn't always compare well to a single, clean deal on the full amount.
And if your financial picture has changed since your original application, such as a salary increase, a move to self-employment or a change in your outgoings, a new application gives lenders the chance to assess your current circumstances. That can sometimes open up better products.
And, of course, if your mortgage isn't portable, the decision is out of your hands anyway.
Timing
Timing often catches home movers out. Mortgage offers have a shelf life, typically around six months. If your move takes longer than expected, or your chain runs into delays, your offer may expire before you complete. That means reapplying, which takes time and isn't guaranteed to produce the same result.
Porting comes with its own timing quirk. When you sell your current property, your mortgage on it ends. If there's any gap before you complete on the new one, your rate will disappear. Most lenders will allow you to reclaim it if the gap is short, but this varies, and it's the kind of detail that matters when things don't go to plan.
So, the earlier you speak to your broker about your mortgage options as a home mover, the more of these variables you can get ahead of. Leaving it until you're already under offer tends to narrow your options.
What about early repayment charges?
Early repayment charges are the fees your lender can apply if you leave a deal before it ends. They're typically calculated as a percentage of your outstanding loan, often somewhere between 1% and 5%, which on a £300,000 mortgage can translate to a significant sum.
They apply during fixed-rate and some tracker periods, and they're one of the most common reasons people are better off porting than switching, because porting to a new property usually, though not always, avoids triggering them.
The important word there is usually. Lenders' porting rules vary, and timing matters.
So, before you make any decision about your mortgage when moving home, knowing your ERC figure is the one thing that can completely change your picture.
So, what's the right answer for you?
It depends on your current rate and how long you have left on it.
It depends on your ERC figure. It depends on how much you're borrowing on the new property and what the market looks like right now.
It also depends on whether your lender will agree to port your mortgage, and what they'll offer on any additional borrowing.
None of that is a cop-out. It's just the reality of getting a mortgage as a home mover, which is why getting professional advice matters, rather than relying on comparison websites or speaking to your existing lender, who can only tell you about their own products.
And that's where FG & Cook can help. Our lead broker, Jason Cook, and his team have more than 50 years' combined experience in the mortgage market, building the kind of lender relationships and knowledge that make a real difference when you're weighing up options like this. We know how different lenders handle porting, which are flexible on timing, and where the best deals sit across the whole market right now.
At FG & Cook, you won't be passed between departments or left to figure things out on your own. You'll work with an experienced adviser from start to finish, who'll look at your full picture and give you a clear recommendation you can trust.
Moving home is one of the moments when good mortgage advice earns its keep. So, if you're planning a move and want to understand your mortgage options properly, we're here to help you.
Book a consultation now to learn more.