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Porting a Mortgage: Do You Keep Your Current Rate?

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

  1. Lender’s Criteria: Your lender will reassess your financial situation when you apply to port. If your income has dropped or your debt levels have increased, they could refuse your application.
  2. Property Valuation: The new property will need to meet the lender’s criteria in terms of value, type, and location. It’s not a given that they will automatically accept the new home just because they accepted the old one.
  3. Additional Borrowing: As mentioned, if you need to borrow more, that extra amount will come with a new rate, which could impact your monthly payments.
  4. Fees and Charges: Don’t forget to factor in any costs. While porting itself may not incur a fee, moving house can still trigger early repayment charges on your existing mortgage, unless you time things perfectly. Your lender may also charge an arrangement fee for any additional borrowing.

When Does It Make Sense to Port?

Porting can be a great option if:

  • You’re on a low interest rate that’s no longer available.
  • You’re moving to a similarly priced property and don’t need to borrow much more.
  • You’re in the middle of a fixed term with hefty early repayment charges that would outweigh the savings from getting a new deal.

When Might It Be Better to Get a New Mortgage?

On the flip side, you might want to reconsider porting if:

  • The new borrowing amount is significant, and the higher interest rate on the extra portion makes the overall deal less competitive.
  • Your lender’s criteria for porting is strict, and you’re unsure if your new property will pass.
  • You’ve come to the end of your fixed term and have more flexible options available in the market.

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.

Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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