What does mortgage porting mean and when does it make sense?

Full answer

Porting a mortgage can be an attractive way to keep a favourable existing interest rate when moving home, but the process is not automatic and comes with several important conditions that can catch borrowers out. **What porting actually means** When you port a mortgage, you are not simply "moving" the exact same loan to a new property with no further checks -- technically, your existing mortgage on the old property is repaid (using the sale proceeds) and a new mortgage is taken out on the new property, but your lender allows you to carry over the same interest rate/deal (and, critically, avoid triggering the early repayment charge that would otherwise apply for exiting your current fixed or discounted rate deal early) provided you meet their current lending criteria. **Why you still need to requalify** Because porting still involves taking out what is, from the lender's perspective, effectively a new mortgage contract on a new property, you must pass the lender's current affordability assessment (based on your income, outgoings, and credit profile AT THE TIME of the move, not when you originally took out the mortgage) and the new property must pass the lender's valuation and lending criteria. If your income has fallen, your outgoings have increased significantly, or the new property does not meet the lender's criteria (for example, a non-standard construction type), porting could be refused even though you are simply moving your existing rate. **Topping up if you need to borrow more** If the new property costs more than your existing mortgage balance, you can often "port and top up" -- keeping your existing rate on the ported portion of the loan, while taking out a new, separate additional loan (usually at current market rates, which may be higher or lower than your ported rate) for the extra amount needed, resulting in two different interest rates running alongside each other on the same overall mortgage. **What if you are borrowing less?** If you are moving to a cheaper property and need to borrow less than your current mortgage balance, most lenders will let you port a smaller amount, but you should check whether an early repayment charge would apply to the portion of the loan you are NOT porting (i.e., repaying early), since porting protection usually only extends to the amount you carry over, not any excess being paid off. **When porting makes the most financial sense** Porting is most valuable when your current mortgage rate is significantly better than rates currently available in the market (for example, you locked into a low fixed rate before rates rose substantially), and/or when your current deal still has a substantial early repayment charge remaining that you would otherwise have to pay if you took out a brand new mortgage with a different lender instead. **Worked example** A homeowner is part-way through a 5-year fixed rate mortgage at 3.5%, with 2 years remaining and a 2% early repayment charge that would otherwise apply if they redeemed early. They sell their home and buy a new one for a similar price, needing to borrow the same £200,000. By porting the mortgage to the new property (rather than repaying it and taking a fresh mortgage), they avoid the 2% early repayment charge (which would have been £4,000 on a £200,000 balance) and keep their 3.5% rate for the remaining 2 years, even though new mortgages at the time of the move are being offered at 5%. **Practical tip** Start the porting conversation with your existing lender as early as possible in your house move, since delays in the affordability reassessment or property valuation can hold up an otherwise straightforward chain, and always ask specifically whether a "top up" portion (if needed) would be on a different rate and term to the ported portion.

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