I can't port my mortgage, what are my options?
This process is beneficial as it allows you to avoid early repayment charges and, if you’re on a good rate, means you can usually keep the same interest rates (although be aware that if the value of your new property requires a larger mortgage, you may have to pay higher rates on the excess or take out a second mortgage to cover this).
Why can’t I port my mortgage?
Issues such as stricter lender criteria or changes in your personal circumstances may affect your ability to port your mortgage, as could a missed mortgage payment in the past or wanting to mortgage for a value different to the amount you’ve already taken out. As porting a mortgage involves a full new application and affordability assessment, you might find that even a portable mortgage is harder to move than you expected.
Following the credit crunch, lenders are now far more stringent when it comes to approving mortgage applications, meaning that people looking to port their mortgage are likely to come across rather more questions and paperwork being asked of them than during their initial application, and stricter requirements in terms of credit checks and affordability tests are likely to apply.
Using the Mortgage Hut’s Mortgage Calculator before you apply for a new mortgage or to port your mortgage can give you a good idea as to whether you’re likely to be approved during the application stage, so you can establish your options early on in the process.
Credit checks & change of circumstances
Some factors to consider may include whether you’re earning less than you were; if you’ve moved from an employed status to self-employed; if you have more debt; or your outgoings have increased, for example, due to the birth of a child.
If you’ve missed any mortgage repayments on your current mortgage, you may also find it difficult to port your mortgage as lenders have been known to reject applications for porting in the hopes that you will voluntarily exit your mortgage agreement with them.
If you’re concerned about any change in your personal circumstances affecting your ability to move house, please speak to one of our mortgage specialists today for completely confidential and personalised advice based upon your current circumstances.
I can’t port, what do I do?
If you’re not able to do either of these things, you may end up being a ‘mortgage prisoner’. This means that you’re unable to get a new mortgage or port your existing deal due to the stricter affordability tests for mortgaging that have prevented many borrowers from moving their mortgages. Again, if you would like any more information on this, please get in touch with one of our mortgage advisors or check our Mortgage Calculator to quickly assess your ability for a new mortgage.
Replace your mortgage
If you do decide to replace rather than port your mortgage, you’ll need to consider any exit or early repayment fees on your existing mortgage which will need to be paid before you can take out the new one. Additional credit and affordability checks will also need to be met, so there’s no guarantee that you’ll be approved for a new mortgage, even if it is with the same lender.
Remortgaging or switching mortgage lenders
Remember that when remortgaging or switching lenders, you’ll still need to pay any early redemption penalties or other fees associated with moving mortgage provider, so do make sure you check the terms of your current mortgage carefully and factor these into your calculations as to the best course of action before making any final decisions.
- The main advantage to porting a mortgage rather than replacing or remortgaging is the avoidance of early redemption fees. These fees can be up to 5% of your outstanding mortgage amount, so on a large mortgage, this can really eat into your budget.
- The majority of discounted mortgages in their first few years will have higher redemption fees attached to them. If you’ve had your current mortgage for some time, this fee may have become less significant, but it’s always a good idea to speak to your current provider before taking any steps towards taking out a new product.
- In addition to any early redemption charges, you’ll also need to pay the normal fees associated with a mortgage application including a valuation fee, legal fees, stamp duty, application and administration fees from the lender and mortgage broker fees where applicable. In contrast, if you’re able to port your mortgage, you can minimise fees as some of these would have been paid when you initially took out the mortgage, and there will be no early redemption fees to pay.
Getting a new mortgage
Checking that any new mortgage is portable is always a good idea, although as you’ve seen, it’s not always as straightforward as the paperwork might suggest and new applications will always need to be completed.
Why not speak with our team of expert mortgage advisers today to discuss what options are best suited to your circumstances and to get an idea as to the criteria you should be considering in reviewing a new mortgage or lender. Even if your personal circumstances have changed and you’re not sure whether you’ll be eligible for a new mortgage, our specialist team are happy to advise and assist with challenging and complex applications.
Because we play by the book we want to tell you that...
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 upon your circumstances. The fee is up to 1.5%, but a typical fee is 0.3% of the amount borrowed.