Porting a Mortgage to a New Property – You may not be aware but most mortgages are portable these days. This portability means that you can transfer your mortgage from one home to the next without a penalty. This is great if you have previously secured a fixed rate deal that you are still in the middle of and decide you want to move and take it with you.
Not all mortgages are portable, you should check with your Lender or Broker before putting your house on the market. If you have had your mortgage for some time or if it is with a specialist Lender there is a chance it might not be portable, so bear this in mind when arranging your mortgage.
Some customers decide not to affect the porting option even when it is available to them. There are several potential reasons for this. Maybe the new Lender will not lend them the extra money they need to fulfil the move. When you port a mortgage, you can only port the amount you currently owe and any additional borrowing needs to be placed on a deal from the Lenders’ current range and that might not be competitive.
If you do port a mortgage and borrow extra monies, the additional borrowing creates something called a “sub-account”. In other words, you have one mortgage but with two different rates of interest applying to it, and it may not be as good as the rate you already have.
This can be a real pain because almost certainly the two products will “overlap” each other and as such it’s difficult to get these to line up without having to let one drift onto the standard variable rate for a while. Customers tend not to like having to change their mortgage deals as often as this and some of them decide to take the “hit” and pay an early repayment penalty to swap Lender and get it all lined up.
Like any mortgage application, you will have to check to see if you are eligible to borrow more money if this is what you are looking for. Porting a mortgage is more difficult than you may think and sometimes and you would be wise to enlist the help of a local Mortgage Broker for their opinion on the options.
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