What is porting?
If you're currently in a fixed rate mortgage and want to move home, you may be able to take your mortgage balance, and your rate, over to a new property when you sell. That's known as 'porting' your mortgage, and it relies on your rate being 'portable'.
Is your rate portable?
You can check whether your mortgage rate is portable by looking at your original mortgage offer, in the section that covers 'flexible features', usually section 9.
Are there conditions?
Even if your mortgage offer states the rate is portable, you don't automatically have the right to use it. The lender still needs to carry out all their usual checks when you apply for the new mortgage, including a credit check, an affordability assessment, and a review of whether you fit their criteria. So you'll still need to make a full application and supply all the required documentation.
The benefits of porting
In the current climate, where interest rates may be higher than the rate you previously fixed at, porting can be hugely beneficial, you keep your existing low rate and carry it across to your next property. You'll also usually avoid early repayment charges (ERCs) if you complete the sale and purchase simultaneously.
What if you want to borrow more?
If you're increasing your mortgage, lenders will usually only allow you to port the remaining balance on your existing rate. Any additional borrowing typically has to be on one of their rates available at the time of your application.
That means your new mortgage will be split into two (or more) rates that may have different end dates for the fixed rate period.
What if you want to borrow less?
If you're moving home and borrowing less than you currently owe, for example if you're downsizing, you may have to pay an early repayment charge on the amount you're reducing by. Some lenders allow overpayments without triggering an ERC, typically up to 10% per year.
Can one person port the mortgage?
There are situations where joint applicants decide to go their separate ways when they sell a property. Rather than paying early repayment charges to exit the mortgage, the lender may allow just one person to port the mortgage over to a new property, subject to meeting all the conditions described above.
You may also be able to add a completely new person to a ported mortgage, for example, if you have a new partner who wants to join you on the new mortgage.
Need to know more?
If you have further questions about porting a mortgage rate, your current lender can explain your options, or speak to a good mortgage adviser who can guide you through it. If you'd like our help, give us a call on 0330 22 333 10.
Your home may be at risk if you do not keep up repayments on a mortgage.