Porting a mortgage – What is it?

Yes, you can port your mortgage to a more expensive property, providing it’s portable. When mortgage porting, this can usually only be done on a like-for-like basis. This means that you can only transfer the amount you have outstanding on the current scheme. Should you need to borrow any additional funds, these will have to be on an alternative rate available with the existing lender.

You can, however, change other aspects of your ported loan arrangements where possible, such as increasing the term if necessary.

You can indeed port your mortgage to a cheaper property, providing it’s portable. You may still need to borrow the same amount. However, for many, this would also involve borrowing less.

Your scheme may permit a penalty-free reduction of a certain percentage in such circumstances. However, this is not always the case. You may find therefore, that if reducing your loan size, it may still incur an early repayment charge.

Whilst it is not advisable to borrow more money than you need, it is worth calculating how much any penalty would be, and for how long. You can then work out if a reduction is best immediately or later down the line. For example, when your penalty reduces or expires. If you are unsure of this, speak to your mortgage broker who can go through the numbers with you.

It may be more financially beneficial to pay any ERCs. The rate and setting up costs could make this more expensive than a completely new scheme. This could especially be the case if you had a higher rate, due to having bad credit that has now improved.

If borrowing more, this will likely be on an alternative scheme. This in turn will have a different expiry date to that which is being ported, meaning that you will have to review your mortgage in stages, and it could restrict your future choice. It could also cost more in the long run due to this.