Moving house while managing a mortgage ranks among life’s bigger financial decisions.
Whether you’re looking to upsize, downsize, or just change location, understanding what happens to your mortgage could save you thousands of pounds.
Many homeowners wonder if they’ll lose their current mortgage rate or face unexpected costs.
The good news? You’ve got several options, and with the right approach, moving home doesn’t have to mean starting your mortgage journey from scratch.
Making Sense of Your Choices
When you’re selling your current home and buying a new one, your mortgage options depend on your current deal and circumstances.
Most lenders offer two main paths: taking your existing mortgage with you (known as porting) or starting fresh with a new mortgage deal.
Consider this: you’re selling your £400,000 home and moving to another property.
Your choice between porting or a new mortgage will depend on several factors. If you’ve secured a competitive fixed rate in recent years, keeping that rate through porting might save you money.
But if you’re paying your lender’s standard variable rate, a new mortgage deal is likely to offer better value.
The timing of your move plays a key role too.
Moving to a new lender during a fixed-rate period will normally trigger early repayment charges – often between 1-5% of your remaining mortgage balance. For a £300,000 mortgage, that could mean charges between £3,000 and £15,000.
Speaking with your broker early in the moving process helps you understand these potential costs.
Read more: How does porting a mortgage work
Is Taking Your Mortgage With You the Right Choice?
Porting your mortgage means keeping your existing mortgage terms when you move home.
While many lenders advertise mortgage porting as a straightforward process, there’s more involved than simply transferring your loan.
Here’s what really happens: When you port a mortgage, your lender technically closes your current mortgage and starts a new one on your next property.
You keep your existing interest rate and terms. For example, if you’re three years into a five-year fixed rate at 2.5%, you’ll maintain that rate for the remaining two years.
But getting the new mortgage approved isn’t automatic.
Your lender will reassess your circumstances – including income, outgoings, and credit status – just as they did with your original application.
Changes in your situation, such as becoming self-employed or having additional commitments like a car loan, could affect their decision.
Read more: Can I move my mortgage to another house?
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Starting Fresh: New Mortgage Options When Moving
Sometimes, getting a new mortgage makes more financial sense than porting.
Perhaps you’ve found better rates in today’s market, or your circumstances have changed significantly. A fresh start gives you freedom to shop around and potentially secure better terms or a larger loan.
You might discover that new lenders offer more competitive rates or flexible features that better suit your current needs.
Remember to factor in all costs when comparing options – including any early repayment charges, new mortgage fees, and legal costs.
Making the Move to a More Expensive Home
Moving to a pricier property often means borrowing more money.
All lenders look closely at affordability when you’re taking on a larger mortgage.
They’ll examine your income, including bonuses and overtime, plus your regular outgoings like childcare costs or finance payments.
When porting, most lenders handle this by creating two mortgage portions – your ported amount at your existing rate, plus additional borrowing at current market rates.
For instance, if you’re porting a £300,000 mortgage and need an extra £50,000, you will keep your original rate on the £300,000 but pay a different rate on the extra amount. This creates what’s effectively two mortgages under one account, each with different product end dates.
Managing a Move to a Smaller Property
Downsizing can bring financial advantages.
Moving to a less expensive property might let you reduce your mortgage balance or clear it entirely. Even after accounting for moving costs, many downsizers free up equity.
If you’re downsizing with an existing mortgage you need to be aware of any ERC penalties. If you will be reducing any part of the mortgage that has ERCs then this will incur penalty costs, even when moving home.
Related reading: Your Guide to Mortgages Without Early Repayment Fees
How Different Property Types Affect Mortgage Porting
When you’re planning to port your mortgage, the type of property you’re moving to plays a big role in whether your lender will approve the transfer.
Even if your finances and circumstances haven’t changed, your new property choice might affect your ability to port your existing deal.
Standard houses and flats usually present few issues when porting.
But if you’re moving to a less conventional property, like a flat above commercial premises or a home with non-standard construction, your lender might decline to port your mortgage – even if they were happy with your previous property.
The age of your new home matters too.
Moving to a period property or listed building could mean your lender requires additional surveys before agreeing to port your mortgage. Similarly, if you’re considering a new-build property, check your lender’s stance early – some won’t port mortgages to new builds at all, while others might require a larger deposit.
If you’re planning to move to an unusual property, speaking with your lender or a broker before making an offer could save you time and money.
They can check whether your chosen property type meets your current lender’s criteria for porting, helping you avoid unexpected issues later in the moving process.
How Expert Mortgage Advice Makes a Difference
Moving house can be stress full and involves complex financial decisions.
Independent mortgage brokers bring valuable expertise, especially when weighing up porting versus a new mortgage. They have access to deals across the whole market and understand different lenders’ criteria.
Brokers help spot opportunities and avoid costly mistakes.
For example, they might know which lenders offer the best terms for your profession or have experience with complex income structures. Their expertise often proves particularly valuable when timing your move to minimise charges and secure the best rates.
Your Moving Home Mortgage Action Plan
Begin your mortgage planning well before you start house hunting.
Six months before your planned move, check your mortgage paperwork or online account for two key details: your current rate’s end date and any early repayment charges.
This timing gives you room to explore your options without rushing decisions.
A quick call to your current lender can give you exact figures for your outstanding balance and confirm if your mortgage is portable. They’ll explain any conditions or restrictions that might affect your move.
Ask them to email these details – having everything in writing helps when comparing options later.
Many homeowners find that speaking with a mortgage broker at this early stage saves both time and money. They’ll review your current mortgage terms, understand your moving plans, and search the whole market for suitable options.
This expertise often proves invaluable, especially if you’re hoping to borrow more or your circumstances have changed since your last mortgage application.
Remember – everyone’s situation is unique
What worked for a friend or family member might not be your best option. Getting expert advice tailored to your specific circumstances helps ensure you make confident decisions about your next move.
Frequently Asked Questions
Yes, most mortgages are portable, meaning you can transfer your current rate to a new property. However, you’ll need to reapply and meet your lender’s current lending criteria.
Read more: Can I move my mortgage to another house?
The porting process doesn’t add any time to a mortgage application. All being well you should receive your mortgage offer in 4-6 weeks.
Related reading: How long does a mortgage offer last?
If you’re moving to a more expensive property, you can often take additional borrowing alongside your ported mortgage. This usually comes as a separate loan, potentially with different rates and terms.
Your lender will need to agree that the extra amount is affordable.
For porting, your lender will look at the loan-to-value ratio on your new property. For a new mortgage, most lenders require at least 10% deposit, with better rates available at 15% or more.
Read more: A Guide to Mortgage Deposits
A broker can search the whole market, comparing porting your current deal against new mortgage options. They often have access to exclusive deals and can handle the application process.
Read more: Why should you use a mortgage broker?
Yes, but timing matters. Most lenders prefer you to be in your new job for at least 3-6 months. If you’re staying in the same industry or have a signed contract, some lenders may be more flexible.
Related reading: How Long Do You Need to Be in a Job to Get a Mortgage?
This depends on your lender’s criteria. Most standard properties are acceptable, but unusual constructions, flats above shops, or properties needing major renovation might be restricted.
Read more: A guide to the different types of houses in the UK
Consider timing your move around your fixed rate end date to avoid early repayment charges. If this isn’t possible, compare the cost of charges against potential savings from a new deal.
