Published On: Wed, Aug 28th, 2019

How mortgage porting works: Is it possible to transfer a mortgage deal to a new home? | Personal Finance | Finance

Getting a mortgage can be the pathway to becoming a homeowner. However, that’s not to say that a person will always end up buying their forever home. With the average mortgage term spanning 25 years, in time, some borrowers may end up looking to move property. But, what happens if one is happy with their existing mortgage deal?

A portable mortgage means that the mortgage can be transferred from the current property to the one being bought.

While it may be described as “taking a mortgage with you”, the process sees the existing mortgage being repaid on the sale of the current property.

Then, the mortgage is resumed on the same terms with the new property.

The same terms and conditions, and rates, can then apply.

While mortgage porting may see the borrower being charged for transferring the mortgage, it may mean avoiding any early exit fees.

Prior to the application, the lender will value the new property in order to ensure they’re willing to lend on it.

It’s worth bearing in mind that a top-up amount may need to be borrowed if the new property costs more than the current property.

The lender will also need to be satisfied that the mortgage-holder will be able to afford the future repayments.

Those who are not tied into a mortgage deal may instead opt to switch providers, should they discover a more competitive rate.

Emily Smith, Mortgage Expert at Habito says: “Contact your existing lender and double check the date that your current mortgage deal comes to an end.

“If the mortgage deal is ending within the next couple of months, it might make more sense to apply to a new lender as the legal work involved with moving house can take some time.”

A mortgage expert has warned that cheap mortgage rates may not always result in the best deal.

Rather, they have recommended taking a closer look at what the borrower’s outgoings will be, according to the True Cost of the mortgage.

Mortgage expert at online mortgage broker Trussle, Dilpreet Bhagrath, told “Getting a mortgage is one of the biggest financial and emotional commitments someone will make in their lives.

“So, it’s important to be financially savvy when it comes to securing the most competitive deal.

“A lot of people will look for the cheapest interest rate when comparing mortgage deals.

“However, taking the True Cost of a mortgage into account is really important.

“This means you’ll know exactly how much you’ll pay over the initial term, accounting for any fees and incentives associated with the deal, as well as the interest rate of the mortgage.”

READ MORE: Mortgage free: How UK borrowers could avoid spending £6,000 and pay off loan 3 years EARLY

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