When it comes to moving house, many people believe it's simplest to port their current mortgage to their new property. While this can be true in some cases, it's important to remember that the process isn't always straightforward, and there may be advantages and disadvantages to this method.

One of the first things to remember is that not all mortgages are portable, meaning you may not be able to transfer your current mortgage to your new home. It's always best to speak to your current lender or mortgage broker to find out if your mortgage is portable, and what fees you can expect to incur if you decide to go down this route.

Assuming you can port your mortgage, there are numerous reasons why it may not be the best option for you. Firstly, changes in your circumstances, such as a reduction in income or higher outgoings, may cause your application to be declined. Similarly, if your credit score has fallen since you took out your original mortgage, you may no longer meet your lender's credit requirements.

Another potential problem is that the property you wish to move to may not meet your lender's criteria. For instance, if it has a non-standard construction, or its value is lower than your current property, you may struggle to secure the same mortgage deal.

Porting your mortgage - advantages and disadvantages

While porting your mortgage can be beneficial, it does come with certain drawbacks.

Advantages

• No need to pay your early repayment charge - This is because you will be keeping the same terms, with the same lender
• Lower interest rates - If your existing deal is at a lower interest rate, you will carry on paying that low rate at your new property.

Disadvantages

• Fees -When you opt for porting, it's important to note that there may be some additional costs associated with the process, including valuation fees, an arrangement fee and legal fees 
• Additional funds - If the new property you're looking to purchase is more costly than your current one, then any extra money that you need may come with a different interest rate. Therefore, this means you will have two parts to your mortgage on different products, one part will be your existing mortgage and the other will be a new deal- each with its own varying rates and end dates.

What could stop me from porting a mortgage?

Here are some of the most common reasons why it may not be possible:

• You've had a change in circumstance: A change in circumstance can impact your porting application being accepted, ie change in income or more outgoings or even a change of employment status.
• Your credit score has lowered: A lower credit score can cause your application to be declined as you no longer meet the lender's internal credit scoring system. This can be for reasons like missed payments or higher commitments.
• The new property type: Lenders have a set list of criteria for properties they will lend on. Your new property may not meet this criteria, ie non standard construction.

If your existing mortgage deal has time left to run and you're looking to move house, you may also need to pay early repayment charges if you switch your deal over before a certain date. Likewise, if you're looking to move to a more expensive property and can't make up the difference yourself, you may need to consider taking out additional borrowing. However, not all lenders will allow this, so make sure you clarify the situation with your mortgage provider.

While porting your mortgage can be beneficial, it's important to be aware of the potential drawbacks. On the plus side, if your existing deal has a lower interest rate, you'll be able to carry this rate over to your new property. You'll also avoid having to pay early repayment charges.

What are the costs for porting my existing mortgage?

However, there may be additional costs associated with porting your mortgage, such as valuation fees, legal fees and arrangement fees. If the new property you're moving into is more expensive than your current one, you may also have to take out additional funds, this is called a top up mortgage. This could mean having two parts to your mortgage, each with different interest rates and end dates.

Finally, it's worth noting that by porting your mortgage, you may miss out on better deals offered by other lenders. If you took out your original mortgage at a time when interest rates were less favourable, it may be more cost-effective to remortgage instead of porting your mortgage.

In summary, porting your mortgage may be a suitable option in certain circumstances, but it's important to weigh up both the advantages and disadvantages before deciding on the best course of action for you. If you're unsure, speak to your mortgage lender or broker to get a better idea of your options.

If you need more information regarding porting or remortgaging elsewhere then LTC Mortgages can help. We can help you with the porting process or help you compare mortgages if porting isn't an option, we will help you secure the best deal for your circumstances. Speak to us today at 0151 662 0188 or email [email protected].