What is Porting a Mortgage?

Full Definition

Porting a mortgage means keeping the same mortgage product -- typically a fixed-rate, tracker, or discount deal -- when moving from one property to another, rather than repaying the existing mortgage and taking out an entirely new one. Most fixed and discounted-rate mortgages in the UK are "portable" by default, meaning the lender allows the borrower to carry the deal, and crucially the remaining tie-in period at the existing rate, across to a new property, which is particularly valuable when the existing rate is significantly lower than current market rates and the alternative would mean losing that rate part-way through a fixed term. Porting is not simply a formality: even though the borrower already holds a mortgage with that lender, moving it to a new property requires a fresh mortgage application and full affordability underwriting against the lender's current criteria, income requirements, and (for the new property) valuation and legal checks, since the lender is effectively agreeing to lend against different security. If the borrower's circumstances have changed since the original mortgage was taken out -- lower income, more debt, self-employment where the original mortgage was on employed income, or simply tighter lending criteria generally in the market -- the port can be declined even though the same lender is involved, sometimes forcing the borrower to either abandon the move, accept a smaller mortgage, or remortgage to a new lender and pay an early repayment charge (ERC) after all. Where the new property costs more than the old one and a larger mortgage is needed, the borrower can typically port the existing balance at the existing rate and "top up" the additional amount with a new tranche of borrowing at the lender's current rate for a similar product, resulting in a blended mortgage with two portions running on different rates; conversely, if the new property costs less, the borrower may have to repay part of the ported balance, and should check whether the lender charges an ERC on the amount not ported even while allowing the rest to port penalty-free. Worked example: a borrower two years into a five-year fix at 3.5% is moving house; by porting, they carry the same 3.5% rate and remaining three-year tie-in onto the new mortgage, topping up with an additional amount at the lender's current five-year fixed rate of, say, 4.8% for the extra borrowing needed, avoiding an ERC on the ported portion but still needing to pass the lender's current affordability assessment on the combined new loan.

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