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A Guide to Porting your Mortgage

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By Pete Mugleston   Mortgage Advisor

Last updated: 21st November 2018

Is porting my mortgage right for me?

 We get lots of enquiries from customers who want to transfer their mortgage to another property. This is what’s known as ‘porting a mortgage’.

If you’re planning on moving and want to port your mortgage, you may be surprised to learn that your lender will need to review your current circumstances to decide whether that’s possible, and with many lenders this is almost the same as if you were making a new application.

If things have changed since the original mortgage was taken out, i.e. a change of income or you’ve picked up some bad credit, they can decline your application. This can be frustrating, but the good news is that there may well be other options available.

In this article we’ll be looking at how porting a mortgage works as well as:

For the right advice on porting a mortgage, it’s always recommended that you speak to an expert.

We work with specialists who make it their mission to find the most affordable mortgage product for you, whether that be your current mortgage deal or a new one with a better rate.

Make an enquiry and one of the experts will be in touch to give you the right advice.

Porting a mortgage: explained

What is the definition of mortgage porting?

You might have a mortgage with very low rate, so you’ll want to keep that deal, especially if it is no longer available, like the cheap tracker rates that could be had for as low as Bank Rate, plus 0.17%.

Essentially, you’re simply taking out another mortgage, but keeping the same rates and conditions. Another advantage is that you won’t pay early repayment charges if they had been applicable.

So how does porting a mortgage work?

When you sell your old home and look to buy a new one, you still have to apply for a mortgage.

It’s important to remember that it’s not the mortgage that transfers to the new home, but the rate, along with the terms and conditions.

The main considerations for the lender will be whether you can still afford the mortgage, and whether their position is likely to change in terms of risk (if the value of the property is different and the loan to value increases, there is more risk – so they may not approve on this basis).

How do I port my mortgage?

As soon as you sell your home, your existing mortgage is paid off in full, even though you’re keeping your previous mortgage and staying with that lender, you’ll still have to apply for a new mortgage.

This will include a valuation of the new property and new affordability check to see if you meet your mortgage commitments.

What happens once I port my mortgage?

Usually your lender will require you to complete on your new home and pay off your existing mortgage on the same day.

Some will allow you to keep your current deal for a limited time before you complete, generally between 30 days and a few as long as three months.

Can I transfer my mortgage to another property?

If you’re happy with your current mortgage rates, terms and conditions, you could potentially port your mortgage from your old property to your new one.

You’ll basically be applying for a new mortgage with your current lender that has the same rates and conditions, and they will decide based on your affordability whether they will provide a mortgage for your next property.

If your lender agrees to give you a mortgage, they will look into porting your existing fixed, discounted or tracker rate deal onto the new property.

Pros and cons of porting a mortgage

Is porting a mortgage worth it? Here are some pros and cons to help you decide on whether it’s right for you.

Advantages of porting mortgage Mortgage porting issues
No early repayment charges as you’ll be keeping the same terms, conditions and porting mortgage rates with the same lender (this makes this product ideal for anyone whose mortgage includes hefty early repayment fees)

 

Staying with existing lender could mean that you’re missing out on more favourable rates on an offer elsewhere, so remortgage could be better alternative

 

Ideal for anyone already on favourable or fixed rates that want to port them to their next mortgage. If you’re moving to a more expensive property, you might have to borrow additional money, which will have to be on a different rate. This can mean product end dates don’t match, which makes it awkward when remortgaging away to other lenders.

 

How easy is it to port a mortgage?

The process of porting can be different lender to lender, but in general it is relatively straightforward, and no different to a standard application. One of the mortgage specialists we work with will be able to handle the application on your behalf regardless, to make the whole process as smooth as possible.

To decide if they are willing to lend to you, your lender will consider your application based on your income, outgoings and credit rating. The new property will also be assessed and valued.

Can I port my mortgage if I’m moving to a more expensive property?

This is possible in the right circumstances and may involve you applying for a larger mortgage, unless you have the cash to cover the difference.

If you are porting and need to borrow more, then the additional borrowing is typically done on a new mortgage product, based on the lenders available rates at the time.

If you are putting in the cash to cover the additional cost, then the lender will likely be in a stronger position and lower loan to value (LTV), meaning the risk is lower and less chance of a decline.

Porting a mortgage’s full terms and conditions and maintaining the current setup is possible, especially if your circumstances haven’t drastically changed since you took out your original mortgage. We also help homeowners with porting a mortgage to a cheaper property too.

Porting a mortgage to a cheaper house

We get loads of enquiries from people about porting a mortgage to a lower value property.

Porting your mortgage to a cheaper property can be a relatively straightforward as you’re not applying to borrow more money.

Despite this, you’ll still have to go through the mortgage process which may have become stricter since you took out your original mortgage.

That said, if the loan amount is staying the same but the property value is reducing, the lender may block the move if they consider their position at greater risk, as the loan to value will increase.

For example, if the property was worth £200k, with £150k mortgage your loan to value is 75%.

If you want to port to a property for £175k, then the loan to value increases to over 85%.

Many lenders will see this as a problem, and only approve the port if the loan to value is maintained at 75%, meaning that the borrower would need to reduce the mortgage to £131,250 and thus repay £18,750.

Porting a mortgage when downsizing and paying some of the mortgage off in this way, can be a great way to reduce monthly mortgage payments, especially for homeowners who are now on a lower income.

Of course, whole-of-market advice should always be sought before going ahead with porting to a smaller mortgage to ensure you’re getting the best rates. Some lenders also have porting mortgage early repayment charges, so always check your lender’s mortgage porting rules before moving forward.

Porting a mortgage and borrowing more

Porting a mortgage to a higher value property will involve your current lender valuing your new property and then assessing your current financial situation to this will help them decide on whether they can increase your mortgage.

As long as you still meet eligibility and affordability criteria, most lenders will be ok with porting your mortgage and allowing you to borrow more.

They’ll look at a number of factors to assess your affordability including:

  • Your credit history
  • Type of property
  • Income
  • Employment
  • Age

If your circumstances have changed since you first took out your mortgage, for example you now have bad credit or perhaps a lower income, your current lender may reject your application for porting a mortgage to a more expensive house.

You could of course switch your mortgage to another provider (and potentially save money!) but be aware that there may be fewer lenders to choose from.

This doesn’t mean that you won’t be able to port your mortgage and borrow more though.

A whole-of-market broker, like the ones we work with, can find you a range of mortgages from lenders who will accept factors like bad credit, change of job or a lower income.

Can I port my mortgage with bad credit?

What happens when you want to port a mortgage but have bad credit? Lenders view borrowers with bad credit as a higher risk and can ask for a bigger deposit or even reject an application.

High street banks won’t usually consider a borrower who is porting mortgages with recent credit issues.

However, as they already have the debt in place, if the mortgage is just moved to a new property and the risk to the lender doesn’t change (or improves their position if the loan to value reduces), they may still consider it.

If the application to port the mortgage is declined due to bad credit, there may well be other lenders happy to approve a brand new mortgage, depending on what the issues are and how recently they occurred.

Low credit score

A low credit score might not sound severe but unfortunately, most high street lenders are likely to decline an applicant if they have it. Thankfully, some lenders have flexible criteria that allows certain credit issues to slide. If you have a low credit score, it could be beneficial to try and build your credit rating before you make a mortgage application. Speak to our advisors on how you can do this here.

Late payments

Most lenders accept one or two late payments if they are older than 3 years, although some are happy with late payments in the last 12 months and a few will even be happy if the borrower is currently behind.

Defaults

The more recent the default, the less likely it is that the lender will approve the application. Most lenders will decline an applicant if their default was within 6 years, some will be happy if it was outside of the last 3 years, a few happy if registered outside the last 12 months, and a handful will accept an applicant even if they have a registered default as recently as this month.

County Court Judgements

CCJs are generally treated in the same way as defaults, although some lenders are less accepting of CCJs as it shows that the borrower has a history of not keeping up with payments.

Mortgage Arrears

Mortgage arrears are a very severe form of late payment for an unsecured account, so if you want to port your mortgage you may face rejection depending on your lender and the date of the missed payment. Most lenders are OK if the mortgage arrears were over 3 years ago, some are happy if they were over 1 year, a few happy if within the last 12 months, and a small handful can consider current arrears.

Debt Management Plans (DMP)

If you have a DMP and are considering porting your mortgage with a high street lender you should be aware that the main factors they will look at are the registration and settlement date.

Most mainstream lenders can decline if an applicant is in a DMP or has had one in the last 6 years. Some are happy if it was settled for 3 years, a few happy if currently in DMP.

Individual Voluntary Arrangements (IVAs)

Again, if you’re porting a mortgage, the main factors that will be considered are the registration date and settlement date. Most mainstream lenders decline if the IVA has been settled in the last 6 years, some happy if settled over 5 years ago, a few if settled 3 years, a handful if currently in IVA.

Bankruptcy

Most lenders including decline an application to port a mortgage if an applicant has ever had one. Some lenders are happy if it was discharged over 6 years, a few happy if discharged over 3 years, a handful happy if discharged over 12 months, one or two can accept day 1 of discharge.

Repossession

The date of repossession is most important. Unfortunately most lenders will decline a borrower if they’ve ever had a repossession. However, there are some lenders who are happy if the repossession was over 6 years ago, a few happy if over 3 years ago, a handful if within the last 3 years.

Check your credit score before you apply

If adverse credit is something you’re worried about, it can be really helpful to check your credit history to establish any financial issues you may have on your report, before you talk to your current lender. If you haven’t already signed up, you can access your free trial credit reports here:

Get your credit rating


Does the property type affect my mortgage porting?

Unusual / non-standard properties can be seen as a higher risk for lenders. The worry is that the more unusual the property, the more limited the market if they have to repossess and resell it.

In fact, porting a mortgage to an unusual / non-standard property can be seen as a higher risk for most lenders. They’ll want to know if a property is good security for the loan, so in the unfortunate event of repossession, they can resell it easily. The worry is that the more unusual the property, the more limited the market, so many porting mortgage rules either don’t allow for unusual properties.

Such properties include:

  • Unique properties,
  • Listed buildings
  • High rise flats
  • Ex local authority
  • Uninhabitable property
  • Non-standard construction
  • Concrete
  • Timber frame

This is often the case with big banks as they have strict porting mortgage lending criteria so they may reject an application for an unusual property, especially one that is uninhabitable. Lenders might ask that to offset the risk, a larger deposit when porting mortgage is put down, - so it isn’t always impossible to transfer your mortgage to another property.

Make an enquiry and we’ll refer you to one of the property mortgage experts to give you the right advice.

How does my income affect me porting my mortgage?

You may find that lending criteria is stricter since you took out your first mortgage and this can affect how much you are able to borrow.

To work out how much they can lend you, most lenders calculate affordability using a more complex model these days, but in general they will cap loans to a multiple of your earnings.

Most will cap at 4x annual income (so someone earning £25k would not be able to borrow more than £100k), some will offer up to 5x income, and a handful even up to 6x income in the right circumstances.

What also plays a part is the type of income you earn, and the amount of other financial commitments you have. The more variable / less reliable the income, the fewer the lenders, and the more debt you have, the less a lender will be prepared to offer you.

How does my employment affect my mortgage porting?

If you are employed, lenders will want to know if your income is a set basic wage or salary or whether your income varies. As well as how much you earn in salaries / wages, they will also look at your bonuses to assess your overall income.

Porting a mortgage on maternity leave

You may find that porting a mortgage on maternity leave can be problematic because the dip in earnings will affect your overall income for that year. Some lenders will take your previous year’s income into consideration but others may see the fluctuation in income as a risk for affordability.

Mortgage porting with a new job

Porting a mortgage with a new job can also be tricky as some lenders see homeowners in new employment as high risk too. This is because if the new job role doesn’t work out, the income and ability to service the mortgage may stop. Some lenders prefer applicants to have been in employment for one or two years as this suggests some security within their employment

Porting a mortgage with no job

We’ve been asked by customers, “Can I port my  mortgage if I lost my job?” This is likely to mean that your application is rejected unless you have another job lined up. If you have a contract in place but have not yet started, it may be possible. The lender however, may just want to wait until your job has started.

Porting a mortgage when self employed

If you are self-employed, most lenders will need proof of three years trading although there are some who will ask for two, a few one, and a handful who will consider 9 months.

Porting a mortgage when retired

If you’re near the end of your mortgage term and have income to comfortably pay off the rest of your mortgage plus other expenses, your current lender may take this into consideration.

If you’re looking for a new lender, it could be harder as there are fewer lenders who will consider older applicants. It’s also handy to know that some lenders cap the maximum age for an application and can also consider how old you’ll be at the end of the mortgage term to decide on whether they’ll accept you or not.

In terms of upper age limits, some mortgage providers won’t lend to borrowers over 75, at others the maximum age is 85, and a minority will impose no age limit as long as they’re confident you will be able to continue paying off the mortgage during your retirement years.

If you have savings and can pay off part of your mortgage early, you could consider porting part of your mortgage. This would leave you with less to pay on your mortgage so could increase your chances of approval.

What should I do if my application to port my mortgage is refused by my lender?

If the lender declines your request to port your mortgage you may be able to appeal their decision. If they don’t agree, then you will need to find a new lender who will be more likely to approve you based on your circumstances. The advisors we work with can help you with this and give you the right advice on what options are available to you.

Mortgage porting FAQs

We get asked a lot of questions about how mortgage porting works and how to transfer a mortgage to another property. Here’s some additional information on porting a mortgage that you might find useful.

How long does porting a mortgage take?

If your lender lets you take your existing mortgage rate and terms with you, and you complete within a certain time period, then generally speaking, porting a mortgage can take between 30 days to 3 months.

Can I port a negative equity mortgage?

If the sale of your house doesn’t cover your mortgage repayments, you may be left with negative equity. It is unlikely that you’ll be able to transfer your negative equity to your new property with most lenders. You will need to pay a deposit for the new property and this will vary depending on many factors including the lender, amount borrowed on the new mortgage and your credit and affordability.

Can you port a Help to Buy mortgage?

Yes, but your Help to Buy loan will need to be paid off with the proceeds from the sale of your current house.

Porting Buy to Let mortgage

Porting a Buy to Let mortgage works in a similar way to a mortgage port for a residential deal. You’ll need to apply for a new mortgage with your lender and then once this is approved they can consider letting you transfer your current mortgage rates and conditions over to the new property.

Porting an interest only mortgage

Lots of customers ask us, " Can I port my interest only mortgage?" Some lenders will allows their customers to port their interest only mortgage if they can prove that they have an acceptable mortgage repayment strategy in place. If you want to port an interest only mortgage, you'll still have to undergo credit checks as you would with a residential mortgage.

Porting a mortgage to a new build

It can sometimes be much more difficult to port a mortgage on a new-build because most lenders tend to view newer buildings as more risky. Buyers often pay a premium price for new homes which can quickly lose value once moved into. (Because they are no longer brand new.)

If the buyer can no longer afford their mortgage, the lender may have to repossess the property and try and sell it. However, it can be very difficult to resell a new home at the fair market price, especially if the development it is built on still has other new properties for sale.

Porting a shared equity mortgage

Can you transfer a shared equity mortgage to another property? You'll be pleased to know that the process of porting your shared equity mortgage is similar to porting a residential deal.

When you sell your current property, the proceeds of the sale will be used to pay off your current mortgage and you will also pay back your shared equity loan. You will then need to apply for a mortgage with the same lender you are currently with if you are happy with your terms and rates. If your current lender is happy to mortgage your future property, then you can port your mortgage.

How much does it cost to port a mortgage?

The best thing to do if you’re thinking about porting a mortgage is to ask your current lender about your porting mortgage terms and conditions, as sometimes there can be porting mortgage early repayment charges involved.

One of the advisors we work with can help you with this and will also check if there is a cheaper, alternative mortgage product that might be better for you.

Porting mortgage fees can include:

  • Penalty fees
  • Early repayment charges
  • Solicitor fees
  • Mortgage broker fees

As well as the associated costs that come with mortgage porting, remember to calculate how much your new property could cost you.

Your expenses could include:

  • Repair and maintenance costs
  • Mortgage payment protection insurance/porting mortgage insurance
  • Building, contents and life insurance
  • Removal costs
  • Service charges if you purchase a leasehold property (usually for flats and some new builds)

Can I port my mortgage overseas?

UK lenders are not likely to approve you porting a UK mortgage to a property overseas.

Porting a mortgage abroad that is already on a property in another country is different than  porting a mortgage in the UK, and this will differ depending on the lender and the country. Speak to an overseas mortgage specialist here for more on this.

Can I use a mortgage porting calculator?

Because there are so many variables involved with porting a mortgage, which could include changes in circumstances such as a change in income, employment circumstances or adverse credit, the use of a mortgage porting calculator is limited and can only give a rough guide at best.

The key to truly understanding mortgage porting is to get the right advice for your situation. The advisors we work with can take you through the various options to give you a guide on how much you could borrow with each different lender and how much you can expect to pay if there are any fees.

Why you should speak to a mortgage porting advisor

Most mainstream lenders including Natwest, HSBC, Barclays and Nationwide won't allow you to port your mortgage if you have bad credit or a drastic change of income. HSBC porting mortgage rules and Santander mortgage porting criteria are also very strict when it comes to lending, especially for borrowers with a less-than-perfect credit score or fluctuating income.

Because of this, it's important that your mortgage broker specialises in mortgage porting, as well as various other areas, such as:

  • Self-employment
  • Income from various sources (bonus/overtime/allowances etc)
  • Adverse credit
  • Non-standard construction property
  • Maximising income and affordability

Speak to a porting mortgage expert

We work with brokers across the UK who can find you the best porting mortgage rates as well as help you through the process of porting your existing mortgage over with your current lender.

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 21st November 2018
OnlineMortgageAdvisor 2018 ©

FCA disclaimer

The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

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