What is porting?
Think of porting as taking the rates and terms of your existing mortgage deal and ‘transplanting’ them to your new home. This can be advantageous if you have a lower interest rate or have a lengthy term that you don’t want to leave behind.
How does it work?
Firstly, you should speak to your mortgage adviser about whether you’d even be eligible to port your mortgage. This is dependent on your lender’s mortgage policies and the terms of your specific mortgage deal. Your adviser will be able to inform you of this.
Next, you’ll need to reapply for the mortgage loan for your new property. If your mortgage is portable, you will need to go through the application process. This includes credit checks, affordability checks, and a property valuation. This is important to be on top of, as your situation may have changed in a way which renders you ineligible for the same deal.
Once you have gone back through the application process, the task of porting begins! This means that once you’re approved you'll use the proceeds from selling your old house to pay off your existing mortgage. Following this, you'll resume the ported mortgage on your new property, just like before.
Benefits & drawbacks
Benefits:
If you locked in at a low interest rate, porting allows you to avoid the potentially higher rates of the current market.
By staying with the same lender, you can avoid some of the potential exit fees/early repayment charges (if you are part way through your current deal).
Porting can streamline the mortgage aspect of moving, potentially requiring less paperwork and faster completion times.
Drawbacks:
Not all mortgages are portable, and you might not qualify for reapproval.
While retaining your current rate is good, the market might offer even better deals by the time you move.
Early Repayment Charges (ERC) might apply if you're outside the fixed-rate period or porting only part of the mortgage.
Is it right for you?
It depends on your individual circumstances. Consider your existing mortgage terms, the new property, and current market rates. If you have an attractive fixed rate and are moving to a similar-valued property, porting might be a smart move. However, if your mortgage isn't portable, your financial situation has changed, or you're looking for greater flexibility, seeking new mortgage deals could be more beneficial.
Before making any decisions, always consult with a mortgage adviser who can assess your situation and guide you towards the best option for your move.
Important information
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
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