Porting Your Mortgage and Borrowing More: A Comprehensive Guide

A question frequently asked by homeowners wanting to move up the housing ladder and buy a new home is whether they can take their existing mortgage with them or if they need to start all over again.

The good news is that it is generally quite possible, and often likely to be advantageous, to take your mortgage with you when moving house – and the process is called porting. Porting a mortgage and borrowing more is a popular choice for those who need to add extra funds to their budget or to help finance the purchase of their new home.

Before you decide whether porting is right for you, you should consider your financial position and speak with a mortgage adviser. They will be able to provide advice and explain what options are available, based on your current situation and any plans you have for the future.

Post Topics 

What is the meaning of Porting a mortgage?

What is involved in porting a mortgage?

Why your request to port your mortgage may be refused?

Getting help with mortgage porting

FAQs

What is the meaning of Porting a mortgage?

Porting is the process by which you transfer your existing mortgage to a new house you are buying.

As the Money Saving Expert points out, this flexibility in the way you use your mortgage may be very welcome, but it is by no means guaranteed. Many lenders offer flexibility because, of course, they want to keep your business – and it may provide you with the chance to retain favorable mortgage terms.

If you satisfy the conditions imposed by your lender concerning the porting of your mortgage, you can keep the product with which you are satisfied and, invariably, continue to pay at a more favorable rate of interest than might otherwise be available.

Simply taking your mortgage with you – “porting” saves you the cost of arranging an alternative mortgage.

What is involved in porting a mortgage?

If you are moving home, it follows that you are borrowing against a different property than the one in which you currently live and for which your mortgage was initially granted.

If your mortgage deal allows the flexibility of porting, you effectively need to reapply for the loan on the new property you want to buy. If you are moving up the housing ladder, that is likely to involve borrowing more money by increasing the size of your mortgage.

In many cases, therefore, the process of porting and reapplying for your existing mortgage may be as simple as that outlined by the website The Advisory:

• the loan is against a different property, so it must be valued by the lender – and you’ll need to pay the valuation fee;

• since you are reapplying for the mortgage, the affordability of the loan and your ability to make the monthly repayments need to be reassessed, although the portable mortgage gives you the same terms of borrowing at the same rate of interest and

• when you complete the purchase of your new home, the mortgage on the previous home is paid off. A new loan commences on the new property – but if you are increasing the size of your mortgage, you may find that the existing rate is retained for the original amount, but a new rate is applied to the extra amount.

Why your request to port your mortgage may be refused?

There are several reasons why your current lender might refuse a request to port your mortgage. And, especially if you are looking to increase the amount you need to borrow, it is important to shop around for potentially more favorable mortgage deals, suggests an article in the Consumers’ Association’s Which? magazine.

There are three main reasons why your current lender might refuse a request to post your mortgage:

• you might no longer meet the lender’s lending criteria – because, for example, your financial circumstances might have changed, you are no longer in the same job and earning the same salary or your outgoings and other borrowings might have increased;

• the lender’s criteria have changed, making you a less desirable customer that they don’t mind losing – especially if you have missed any repayments or you have become older than the lender now feels comfortable lending to or

• the new property you have chosen to buy might not meet the lender’s criteria – it may be of non-standard construction, for example, be a listed building, have a thatched roof, or require extensive modernization and refurbishment.

Although the flexibility of porting your existing mortgage offers potential advantages, therefore, you may find that you are unable to do so.

If you are unable to port, you may need to consider starting anew by applying for a different mortgage. Do note that this is likely to involve the expense of an early repayment chargeA fee charged by lenders if the borrower pays off the mortga... for paying off the mortgage on your existing home, an exit fee (for paying off your mortgage), and the charges for arranging your alternative new mortgage.

Getting help with mortgage porting

Seeking specialist advice may make sense. Using the services of a mortgage broker, for example, may help you choose the most suitable and cost-effective solution when looking to buy a new home – either by porting your mortgage or getting a new one.

It is important to consider all of your options when deciding how to proceed with porting your mortgage. Depending on the size of the loan you are looking for, as well as other factors like your credit history and income level, there may be a range of alternatives available to you.

One option that can offer significant advantages is to take out a secured loan alongside your mortgage. This would allow you to borrow more than you could with the current mortgage at a lower interest rate. It’s important to bear in mind, however, that secured loans tend to have shorter terms and will generally require repayment within just a few years.

FAQs

Can I Port My Mortgage with Santander and Borrow More?

Yes, you can port your mortgage with Santander. The amount you can borrow in addition to your current mortgage balance depends on their lending criteria, your affordability check, and your credit score.

What Are the Terms for Porting a Mortgage with Santander?

Santander’s mortgage porting terms depend on the type of your current deal, be it a fixed-rate or variable-rate mortgage. You’ll need to meet their lending criteria, which includes an assessment of your credit history and current mortgage terms.

Can I Borrow More Than the Original Mortgage Amount with Santander’s? 

Borrowing more than your original mortgage with Santander is possible, subject to an affordability check, your credit score, and the lender’s policies. Additional lending is typically capped at a certain percentage of your property’s value.

Is It Possible to Get a Competitive Mortgage Rate When Porting?

Yes, you can find competitive mortgage rates when porting, but this depends on the current mortgage market, your personal circumstances, and the mortgage product offered by your lender.

Are There Any Fees Associated with Porting a Mortgage?

When porting a mortgage, you may encounter fees such as an arrangement fee, valuation fee, and possibly an exit fee from your current deal. It’s important to factor these into your financial planning.

Do I Need a Mortgage Broker to Port My Mortgage?

While not mandatory, a mortgage broker can offer valuable financial advice and help you navigate through the mortgage porting process, ensuring you get a deal that suits your needs.

How Does My Current Mortgage Deal Affect Porting?

Your current mortgage deal, including its rate and terms, will influence your porting options. Lenders will assess your current mortgage balance, monthly payments, and any repayment charges payable.

What If I Have a Poor Credit Rating?

A poor credit rating can affect your mortgage porting options. Lenders will conduct a credit checkA check of a borrower's credit history, which is used by mor..., and any credit issues could limit your ability to borrow more or secure a favourable mortgage term.

Can I Port My Mortgage to an Expensive Property?

Porting a mortgage to a more expensive property is possible, but will depend on your financial circumstances, including your annual income and the loan-to-value ratio. Additional borrowingWhat is Additional Borrowing? A Quick Overview When you take... may be required.

10. Are There Different Types of Mortgages Available When Porting? – Yes, when porting, you can choose from various types of mortgages, such as fixed-rate, tracker, or variable rate mortgages, depending on what your current lender or new mortgage provider offers.

11. What Happens to My Mortgage Term When I Port My Mortgage? – When you port your mortgage, you may have the option to keep your current mortgage term or negotiate a new one, depending on your lender’s policies and your financial situation.