If you’re considering moving home, you may be concerned about what will happen with your existing mortgage. The good news is that most mortgages are fully portable – which means it should be straightforward to transfer it seamlessly to a new property.

Here’s more information about the process.

Understanding mortgage porting

Porting a mortgage, on paper, sounds like the easiest option. However, it’s important to understand exactly what’s involved.

• It requires re-application. Your mortgage lender is under no obligation to agree to port your mortgage. This is the case even if the mortgage is listed as portable. You’ll need to reapply for the loan, which may be harder than it was originally, especially if your financial situation has changed.
• More money might be involved. If your new home costs more than your existing one, you’ll need to borrow more money. This may result in a situation where you’ll be recommended an extra mortgage product to cover the additional amount. If this is the case, then further product fees might be involved.
• The rates may not be favourable. If you choose to port your mortgage, you’ll be tied into your lender’s rates. They may be operating at a good rate, or there might be other deals out there that will save you money in the long run.

Steps to take

• Find out what your options are. If you don’t want to transfer your existing mortgage, what are the financial implications? For example, you may face a hefty early repayment charge for not completing the term of your loan.
• Shop around. It’s always worthwhile exploring the market and seeing what other mortgages are available. A substantially better deal might be a financially savvy option, despite having to pay an early exit fee on your existing mortgage.
• Talk to a mortgage adviser. If the process seems bewildering, talk to an impartial expert. They’ll examine your options in greater detail, then provide some recommendations based on your unique circumstances.

Other factors to take into consideration

When applying to port a mortgage, your lender will examine several aspects of your current situation. These include:

• Your financial situation. Your lender is required by law to make sure that you can afford the repayments. They’ll not only examine your salary – they’ll also look at your current outgoings too.
• Your credit score. Your credit score will be assessed to see how you’ve handled your debt in the past. It goes without saying that a good credit score is more likely to secure approval for mortgage porting.
• The new property. Nowadays, mortgage lenders are much fussier about what sort of property they’ll approve a loan for. Be warned that your new home may not be acceptable to them.

If your mortgage lender refuses your application to port your loan, then there are other options available. In this situation, it’s best to speak to your mortgage adviser, who will identify these for you.