What does porting a mortgage mean and can I take my mortgage to a new house?

Full answer

Porting a mortgage means moving your current mortgage product - its interest rate, conditions and remaining term - from your old home to a new one when you move, rather than redeeming the loan and starting again. The main attraction is keeping a competitive rate you would lose if you repaid early, and sidestepping early repayment charges (ERCs) that can run to several percent of the balance. Who it suits: borrowers mid-way through a fixed deal who are moving home and do not want to break the fix. How it works: porting is not automatic. You must reapply and pass the lender's current affordability and credit checks, and the new property must meet its valuation and lending criteria - so a move can still fall through if circumstances have changed. If you are borrowing more for a pricier property, the extra is usually a separate new loan at today's rates, leaving you with two sub-accounts on different rates and possibly different end dates. If you borrow less, you may face an ERC on the portion you are repaying. Timing matters too, because the sale and purchase must complete close together; many lenders allow a short window (often around 30 days, but check your lender) to complete the port without losing the rate. Worked example of the structure: if you have GBP 150,000 left on a 4% fixed deal and need GBP 220,000 for the new home, you could port the GBP 150,000 at 4% and take an additional GBP 70,000 on a new product at the current rate, blending the two. Remember that buying a new home also triggers Stamp Duty Land Tax (or LBTT in Scotland, LTT in Wales) on the purchase price - porting only concerns the loan, not the property tax. Use the mortgage calculator to model the blended payments and the stamp duty calculator to estimate the tax on the new purchase.

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