When moving home, you may consider taking your existing mortgage with you.
In theory, many mortgages are portable, but there are a number of reasons affecting whether you will be able to do it.
What are these reasons?
Firstly, you have to reapply for the same deal when porting your mortgage. Because of the increased difficulty in obtaining a mortgage now than a few years ago, you may not be eligible due to changes in your circumstances, or the lender’s.
Secondly, you may not be able to borrow any more with your current lender depending on their lending limit. Even if you do borrow additional money from the lender, they may insist it is on another mortgage product, which may involve arrangement fees and a higher interest rate.
Finally, porting your mortgage means that you are tied to your current lender, limiting your options, meaning you may not be on a competitive rate and leaving you paying a higher interest rate.
I can port my mortgage, but I’m unsure whether it’s worth it…
This all boils down to the math. If there are cheaper rates out there, it may be worth seeing if it’s worth paying any charges for leaving your existing mortgage and taking out a new one.
Generally speaking, if you only have a short time remaining on your existing mortgage deal, then it may be worth paying the exit fees and switching. However, if you have a long time remaining, the fees will be much higher, meaning it may not be worth it financially.
What happens if I can’t port my mortgage?
If you are unable to port your mortgage, you will have to review your options.
You can leave your existing mortgage deal, but the fees can potentially add up to thousands of pounds.
An early repayment charge, an exit fee, plus any fees to arrange your new mortgage, all need to be taken into account.
For advice on porting your mortgage, speak to one of our expert advisers who will be able to help you with the next steps.