What is porting?
It’s okay, we have not just diversified into the world of fortified wines, and we are definitely talking about something that is very relevant to the mortgage industry....
Porting is the process of transferring your existing mortgage deal to a new property. With a seemingly unrelated name, porting can be an unknown service, and it can come as a surprise to clients that there is the option to keep hold of their existing product and interest rate and benefit from this being moved over to a new home.
Why port a mortgage?
When a client comes to us wishing to buy a new home but with a period of time left on the term of their current mortgage deal, it becomes a question of whether porting is advantageous for the client. With a series of considerations - term remaining on the deal; the amount of the outstanding mortgage balance; the amount of the Early Repayment Charge (ERC) that would have to be paid to leave the current deal; how much additional money is needed to buy the new house - we have to establish whether moving the existing deal to the new house and borrowing additional money with the current lender on a second mortgage product is more financially suitable for a client, versus getting one mortgage product with a new lender and paying the ERC to leave their current deal.
‘Porting typically comes down to explaining how the overall cost was cheaper for the client.’
Economic instability and increases in interest rates can make moving to a different lender with a higher interest rate more costly. As always, we will look at all of your circumstances and recommend what is the most suitable course of action.
Who might port their mortgage?
Sometimes it is not just a question of suitability but possibility: not all lenders allow their mortgage products to be ported. If porting is possible then it’s about suitability: does a client still meet the criteria and affordability of their existing mortgage product? A client’s circumstances can change during the term of their deal, and as a full application has to be made to port a mortgage, all current circumstances will need to meet the criteria and affordability once again.
All factors will be considered and clearly advised in the safe hands of an experienced broker like HomeLife Financial Solutions Ltd. Cheers to that!
Think carefully before securing any other debts against your home.
Your home may be repossessed if you do not keep up repayments on a mortgage or other debts secured on it.
You may be charged a fee for mortgage advice. The precise amount will depend on your circumstances.
Share this post: