This guide was last updated 22 October 2024
Do You Take Your Current Rate with You When You Port a Mortgage?
Moving house is often seen as one of life’s most stressful events, and when you throw a mortgage into the mix, things can feel even more complicated. A question we frequently get asked is: If I port my mortgage, do I take my current rate with me?
It’s a great question and something we will look at in detail here.
What is Porting?
In simple terms, porting a mortgage means transferring your existing mortgage deal to your new property. For many homeowners who are on a particularly favourable interest rate, this can be a very appealing option, especially if that rate is lower than what’s currently available in the market.
Do You Keep Your Current Rate?
The answer is generally yes—you do take your current rate with you. However, there’s a catch (isn’t there always?). Porting your mortgage means you’re able to transfer the terms of your current deal—interest rate, early repayment charges, etc.—to the new property, provided your lender agrees and the property meets their criteria.
But it’s not always as straightforward as it sounds and it is not automatically agreed as some people believe. In effect, you’re essentially applying for a new mortgage based on your new property and financial situation, albeit under the same deal you had before. Lenders will still run affordability checks, so if your circumstances have changed significantly since you first took out your mortgage, you might not qualify for the same amount you previously borrowed.
Likewise, the property will be subject to a lender’s valuation, and they may want the same Loan-to-Value (LTV), to apply. For example, if your existing property has an LTV of 70% and the new property means you need 85% LTV this could be an issue.
Partial Porting: What If You Need to Borrow More?
This is where things can get interesting. If the price of your new home is higher than your current one, and you need to borrow more, the additional amount will likely be subject to the lender’s current rates. So, you could end up with a mortgage made up of two different rates—your original rate on the ported amount and a new rate on the additional borrowing.
This can be a bit tricky to manage, especially if the new rate is significantly higher. In some cases, it might even make sense to ditch the porting option altogether and look for a new deal across the whole amount. As always, it’s worth speaking to an adviser to run through the numbers and see what works best for you.
It may also be the case that the Early Repayment Charges on the two different parts of the mortgage run out at different times, which again, can make things difficult for remortgage possibilities in the future so careful advice and planning needs to be taken.
The Key Considerations
When Does It Make Sense to Port?
Porting can be a great option if:
When Might It Be Better to Get a New Mortgage?
On the flip side, you might want to reconsider porting if:
Final Thoughts
Porting a mortgage can be a valuable option, but as with all things mortgage-related, it’s not a one-size-fits-all solution. While you do keep your current rate on the ported portion, the overall impact on your finances can vary based on your new borrowing needs and lender policies.
The key takeaway here is to get some professional, down-to-earth advice before making any decisions. At Coreco, we’re always here to guide you through these choices, ensuring that you don’t just take what seems to be the easiest path, but the one that’s best for your long-term financial well-being.
As ever, don’t hesitate to get in touch if you’re considering moving and want to explore whether porting is right for you. We’ll do the heavy lifting so you can focus on the excitement of your new home!
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 on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.