Moving House Mortgage
Getting a moving house mortgage is always a complicated process in the UK. In this helpful guide on moving house mortgages for existing properties, we discuss the topic in detail. If you are interested in a similar mortgage, you can contact our team of mortgage brokers.
It is estimated that about a half of homebuyers are already on the housing ladder – moving from their old home to a new one – and the remaining purchasers are first-time buyers, reported the Guardian newspaper on the 4th of January 2022.
So, if you are an existing mortgage customer moving house, what are your options for managing a future loan?
Post Topics
What happens to my existing mortgage when I move house?
What does porting a mortgage mean?
Remortgage with your current lender
What happens if I need a larger mortgage?
How We Work
1: We contact you and take down your details, income outgoings, name, address etc.
2: We will research the whole market and email you a detailed quote as well as a list of documents to proceed.
3: You upload the documents and information needed via our channel our online portal.
What happens to my existing mortgage when I move house?
Whether you are looking to trade up, downsize, or want to live in a different neighbourhood, there are several options for home mover mortgages.
Those options fall into two broad choices where you may:
- transfer your existing mortgage to your new home – in the language of mortgage lenders, this is known as “porting”; or
- you could instead pay off your existing mortgage and start all over again with a new, replacement mortgage.
To decide between these two options, you will need to balance the respective pros and cons very carefully – and to help you to do justice to that, you might want to consult an experienced mortgage broker.
What does porting a mortgage mean?
Porting is the term mortgage lenders use when you transfer your existing mortgage –together with all its terms and conditions – from your old house to the new home you are buying.
Most mortgages have the capacity for porting in this way. Since many also incur penalty charges for early repayment, being able to port your existing mortgage is not only convenient but also avoids any such penalty.
But don’t expect it all to be necessarily plain sailing – there are still specific issues you might want to consider, which may vary from one lender to another. Once again, therefore, an early consultation with an independent mortgage broker might be the prudent course of action.
Remortgage with your current lender
Even if you have the option of porting your existing mortgage, you might still want to consider remortgaging with your current lender – effectively repaying the existing mortgage to take out an entirely new one with the same lender.
This allows you to search for any new deal that might have come along since you arranged your existing mortgage – not only with improved terms and conditions but potentially with a more favourable rate of interest.
That new deal might come at a cost, though. To vacate your current mortgage and unless you are in a standard variable rateThe interest rate charged by the lender that can vary over t..., you may have to pay an early repayment fee – typically between 1% and 5% of the value of the remaining balance of your existing mortgage. The cost of your early repayment chargeA fee charged by lenders if the borrower pays off the mortga... will also depend on how many years remain until the full term of your current mortgage.
If you are already repaying your current mortgage at the lender’s standard variable rate, you are unlikely to be charged a fee for early repayment.
In addition to the exit fee for your current mortgage, you will also face the fees for the property valuation and the mortgage arrangement of your new loan. This calls for carefully balancing the respective savings in porting your mortgage against the costs of remortgaging.
Remortgage with a new lender
If you are considering a new mortgage, you might go the whole hog and look to a new lender too. Any new mortgage could be used to pay off the old one, or you could use the proceeds from the sale of your former home to pay the outstanding balance on your old mortgage.
You might want to consider this option if the housing market has risen sharply or significantly in your area since you bought your home. But, once again, remember to do the maths. There are likely exit fees, early repayment charges from your current mortgage, and valuation and arrangement fees for the new loan on top of everything else.
What happens if I need a larger mortgage?
If you are trading up by moving from one home to another, you may also need to increase the size of your mortgage.
Whether you are porting an existing mortgage or decide to arrange a new mortgage – with your current lender or otherwise – you are certain to face affordability tests related to the loan size (or the increased borrowing on any mortgage you manage to port).
Once again, if you pursue the option of a completely new mortgage, you first need to make any early repayment charges to the former lender and pay the valuation and arrangement fees to your new lender.
Can I move house without changing my mortgage?
As we have seen, you can move house without a new loan by simply porting a mortgage – provided that your current loan is portable.
Even where your lender has a portability policy, however, bear in mind that they will take this opportunity to check once again the current value of your home and assess your financial circumstances to ensure that the loan remains affordable.
Next steps
If you are an existing mortgage customer moving house, we have seen that there are several options – from porting your existing mortgage to remortgaging with your current lender or starting over with a completely new mortgage lender.
So that you choose the option that suits your needs, and to help you carefully weigh the respective advantages and disadvantages of one course of action over another, you might want to consult experienced experts in this field, such as ourselves here at NeedingAdvice.co.uk.
FAQs- Moving House Mortgage
What happens to my mortgage when I move?
Moving house can involve some unexpected expenses. If you plan to sell your current home before moving, you will need to factor these into your budget. You may find it helpful to speak to a financial adviser who specialises in helping people move houses.
Can I move my rate to a property that has recently been bought outright?
No, it is not possible to move your mortgage rate to a property that is already owned or purchased. To move your mortgage rate, you need to buy a property. If you are interested in moving house mortgages, you can contact our team of qualified mortgage advisers.
How much does it cost to move my mortgage?
The amount of money required to move your mortgage depends on how many times you’ve moved in the last five years. The more often you’ve moved, the higher the cost.
The average cost of moving a mortgage is £1,500. This includes all costs involved in moving your home, including legal fees, surveyors fees, removalists fees, storage fees, etc. It doesn’t include the price of buying a new property or home.
Can I move my mortgage rate to a property I purchase for buy-to-let?
No, you can’t move your mortgage rate to a property you purchase for buy-to-let. However, you can transfer your residential mortgage rate to a residential property that you are purchasing. You can always contact a mortgage an independent mortgage broker who can help you with your mortgage application.
Can I get a moving house mortgage with an adverse credit score?
Yes, you can get a moving house mortgage with a poor credit record, but you need to contact an independent broker to apply for the mortgage. Every lender has different criteria for affordability checks, some lenders could accept a poor credit record, but some will not accept mortgage applications with adverse credit ratings.
In addition, if you also have a recent credit card debt, you should avoid credit checks for some period.
How can I check my credit report online?
You can always check your credit report from different credit reference agencies. If you are interested, you can contact a financial adviser for your credit scoring.
