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What happens to your mortgage when you move?

MORTGAGES | 17.03.2022

If you’re planning on moving homes you may be wondering what will happen to your current mortgage, can you take it with you? Or should you look for a better deal? It is a good idea to talk to a mortgage advisor if you are unsure about what is best for you. If you are confused about your options take a look at our guide below.

 

What are your mortgage options when moving house? 

Porting your mortgage

  Your first option would be to port your mortgage. This means taking your current terms with your existing provider across from your old home, to your new one. You may want to consider porting your mortgage if you are satisfied with your current mortgage deal, if you have a low interest rate for example. Porting your mortgage may also be a good idea even if you are able to find better interest rates elsewhere. It may still be preferable as it can help you to avoid the early repayment charges that you may face if you were to instead opt to remortgage when moving. If this is something you are considering you may want to first investigate as to whether your mortgage can be ported. Some may find that their current mortgages do not allow for this. You should be able to check with your mortgage lender, alternatively you may be able to find the appropriate information in the documentation produced initially from the mortgage deal. If you are able to port your mortgage, you will be reassessed as you were in your initial mortgage application. Unfortunately if your financial circumstances have since changed, you may find it harder to have your mortgage deal re-approved for your new property.   

Remortgaging

  Alternatively if you aren’t able to port your mortgage or perhaps don’t want to, you may want to consider remortgaging. If your current mortgage deal is not very favourable it may be a good opportunity to look for better interest rates. However if you are planning to remortgage it is important you take into consideration additional fees that may occur. You may be subject to early repayment charges, these exit fees are charged by many lenders, and can be quite steep depending on the length of time you have remaining for your mortgage term. On top of this there will likely be both arrangement and valuation fees attached to your new mortgage. If you are on the standard variable rate you will be able to avoid these early repayment charges. However, if not you should take their financial implications into consideration.  

What happens if my new property is more expensive?

  If you are considering moving to a more expensive property with a larger mortgage you will need to be able to show you are able to financially support such a move. Your lender will likely run assessments of your financials in order to determine if you’re able to afford repayments. You will be much more likely to be accepted for a larger mortgage if you have either had an increase in your monthly income such as a payrise, or have reduced your outgoings. It may be the case that you have built up a significant amount of equity in your current home that you are able to put down a large enough deposit on a more expensive property. Making your monthly repayments cheaper as a result.  If you are looking to move house but are confused about how to find the best deals for your new mortgage get in touch with our team of advisors today.
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