How does porting a mortgage work?
Firstly, you’ll need to find out if you can port your mortgage, i.e., is your scheme portable?
How do know if I can port my mortgage?
This will have been highlighted to you when you took out the current product. If unsure, it will be set out in your original illustration and mortgage offer.
Secondly, you must establish if what you are looking to do, qualifies for your scheme to be ported. So, in what situation would you port a mortgage? This would be where you are looking to sell a property and purchase another. By transferring your current rate, it should avoid you having to pay any early repayment charges (ERCs) that may apply.
To port your mortgage involves a very similar application process to any other property purchase. The only difference is that you need to factor in the current balance on the present rate when looking at the figures.
You may also find that the mortgage illustration and offer are slightly more in-depth. This is due to it covering the terms and conditions of the current scheme being ported and the scheme for any additional borrowing where applicable. The mortgage payment quoted will also be broken down for each part where applicable. Ensure you are clear on what the total amount will be each month.
Finally, just because your mortgage is portable does not mean that it is guaranteed you can do this. Your application will still have to be approved by your existing lender taking their current criteria into consideration. They are well within their rights to refuse your application if they have just cause.
Frequently asked questions
- Can I port my mortgage with bad credit?
- Can I port my mortgage to a cheaper property?
- What’s the difference between porting a mortgage and remortgaging?
- What fees are involved?
- Do I need to give notice?
Yes, you can port a mortgage with bad credit. Depending on your credit history, it may mean your current lender will decline your application.
It’s also worth noting that many bad credit mortgage schemes are not portable. So, if you had to get a mortgage with a specialist lender due to bad credit originally, it could be that your scheme is not portable regardless.
Yes, this is possible, providing your term is portable. You may still need to borrow the same amount. However, for many, this would also involve borrowing less.
Your scheme may permit a penalty-free reduction of a certain percentage in such circumstances, however, this is not always the case. You may find that if reducing your loan size, it may still incur an early repayment charge.
Porting is the process of transferring an existing mortgage with the same lender to another property being purchased.
Remortgaging is the process of transferring your mortgage from one lender to another, on a property you already own. Invariably, this is when a current scheme is expiring.
Typically, the fees involved are the same as any other property purchase application. Fees to expect are:
- Survey or property valuation fee.
- Lender’s arrangement and/or booking fee.
- Solicitor’s fees.
- Stamp duty where applicable.
There is no requirement for you to give anyone notice if you are porting your mortgage. However, it’s best to ensure you advise your solicitor early in the proceedings. This will ensure they are aware that any early repayment charges are to be waived where applicable.