I’m moving home, can I take my mortgage with me?

Murray Souter, an ESPC Mortgages independent mortgage adviser, gives insight into whether you can take your mortgage with you when moving home.

Whether you are upsizing or downsizing, when you move house one of the main aspects to consider is your mortgage.

if you have a mortgage product with early repayment charges, it is usually possible to transfer the mortgage on to a new property. This is called porting and would be subject to your existing lender’s criteria, terms and conditions.

How does porting a mortgage work?

Porting a mortgage essentially means that you are transferring your mortgage to your new property., This can help you avoid an ‘Early Redemption Charge’ (ERC) which would apply if you were to pay off the mortgage in full. The mortgage would continue to run for the remainder of the initial chargeable period, as it would have if you hadn’t moved.

The other option is to pay the ERC and start a new mortgage elsewhere. Your mortgage adviser will assess both options to determine which is the most cost-effective.

If you are buying a more expensive house, you can port your existing loan and then take on additional borrowing with the lender on a separate mortgage product (based on rates at that time) that would run alongside the original mortgage. This is normally done under a separate account but sometimes your lender will allow you to align the term of your existing mortgage with your new one to keep things consistent.

It is also possible to port to a new house and reduce the loan but there would likely be a fee for the portion the loan will be reduced by.

Is porting a mortgage a good idea?

Porting a mortgage may allow you to keep your existing mortgage terms, avoid early repayment penalties and sometimes there can be a quicker assessment due to your existing relationship with your mortgage lender.

However, porting a mortgage does limit you to using products from your existing lender. You may also not be able to consolidate all your borrowing under one mortgage for a period of time – this might mean more arrangement fees in the future to get preferential rates for both accounts until they are aligned.

If you are unsure, it is worth seeking advice from an ESPC mortgage adviser to work out if this is the right option for you.

Independent mortgage advice

If you’re swithering over whether buying with a friend is the right financial option for you, it’s worth speaking to a mortgage adviser to discuss your options.

As independent mortgage advisers, ESPC Mortgages can help with all aspects of understanding your budget, applying for a mortgage and dealing with the relevant insurance requirements.

The initial consultation with an ESPC Mortgages adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £395 (£345 for first-time buyers). YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT.

The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

ESPC (UK) Ltd is an Appointed Representative of Lyncombe Consultants Ltd which is authorised and regulated by the Financial Conduct Authority.

ESPC magazine

This article appeared in the October 2022 issue of the ESPC magazine. Find out more about the ESPC magazine and read the latest issue online.