Can I move my current mortgage to a new house?
If you’re moving house and you already have a mortgage on your current home, you might be able to transfer – or ‘port’ – your mortgage to your new property.
It’s worth checking your mortgage details to find out whether your deal is in fact portable. You can either look through the documents you were given when you arranged the deal, or ask your broker or lender.
Even if porting your mortgage is possible, you’ll still need to reapply and go through the same affordability and credit checks you went through to get the mortgage. You’ll also have to pay for a valuation, as well as legal fees and stamp duty.
You may find it harder to get approved for the same mortgage if your financial circumstances have changed. For example, if you’ve changed job or become self-employed, had children or seen some other change in your financial circumstances.
What happens if I need a larger mortgage?
If you need to increase the size of your loan to buy a more expensive property, you’ll also need to meet the lender’s borrowing criteria for that extra amount, which may be more rigorous than for your original loan.
You may also have to pay a fee for arranging the new mortgage.
As an alternative to porting and increasing your existing mortgage, you may decide to take out a new mortgage with a new provider if you can find a more competitive deal. Be aware, however, that you may need to pay early repayment charges and other fees to end your current mortgage deal.
You would therefore need to make a number of careful calculations to see which would be the most cost-effective option.
What to watch out for if you port your mortgage
If you decide to port your existing mortgage but you need to borrow more, you may end up with two mortgages.
This is because your existing lender might require you to take out a separate loan to cover the difference. This can mean paying another mortgage arrangement fee and possibly getting locked into a deal that has a less competitive interest rate.
But if you decide to apply for a new mortgage altogether, even with the same lender, you may have to pay an early repayment charge to get out of your existing deal early.
For a fixed-rate mortgage, this is typically between 1% and 5% of the mortgage amount you have left to pay, depending on how far into the mortgage term you are – so if you’re in the final year, you’ll pay less than if you were in the first.
Some tracker mortgages will also come with early repayment charges, so check with your lender and see if there are any fees to end the deal early.
If you’re on your lender’s standard variable rate – SVR – you’ll be able to move to a new mortgage without paying any early repayment charges, although there may be other fees to pay.
Before you decide on your course of action, ask your lender for full details of the charges and fees you would face in each circumstance so you can make a measured decision.
Tips for keeping your mortgage costs down
If you want to keep costs down, here are a few tips:
- If you don’t need to increase your borrowing, porting an existing mortgage to a new property through your current provider can help minimise costs
- If you are tied into a fixed-rate deal and you can delay moving, it’ll be cheaper to wait until your fixed deal has come to an end and you’re on your lender’s SVR as you won’t have to pay any early repayment fees
- Even if you do have to pay an early repayment fee, you may find the cost is offset by switching to a mortgage with a lower interest rate, so it’s important to compare the costs
Moving to a bigger house with a larger mortgage
If your house has gone up in value since you bought it, you’ll have built up ‘equity’ – the money that would be yours if you sold the house and settled the mortgage.
Having equity can increase your chances of getting a bigger mortgage for a more expensive property as you can put it towards your deposit.
You’re also more likely to get accepted for a larger mortgage if you’ve had a payrise or reduced your outgoings, as well as kept up with your existing mortgage repayments.
Moving to a cheaper house with a smaller mortgage
If you’re looking to downsize, an increase in the value of your current home could mean that you’ll be able to take out a smaller mortgage and reduce your monthly repayments – provided your personal financial situation hasn’t changed.
If the difference in value is large enough, you may even be able to get a cheaper home mortgage-free by using the equity you have built up in the new property.
Moving house with negative equity
If your home is in negative equity – where the current value of the house is worth less than your existing mortgage – it’s best to talk to your mortgage provider before moving forward with any home purchase plans as you may find it harder to get accepted for a new mortgage.
You may find that you can only move home if you need to move due to a new job or they may be certain restrictions on the type of property you can buy.
When to apply for a mortgage when moving
If you’ve just started thinking about moving, it might be a good idea to speak to your mortgage provider to find out how much money you could borrow if you were to move, and what fees you’d have to pay.
It’s also worth talking to a mortgage broker to help you make your decision – you can phone our broker partner London & Country for free on 0800 073 2310.
Comparing mortgages when you’re moving home
Comparing mortgage quotes on MoneySuperMarket’s mortgage comparison tool can help you find the best mortgage deal for your new home. Choose ‘house purchase’ from the mortgage type dropdown to compare example mortgage quotes from different providers.
Play around with the calculator at the top of the tool so you can get an idea of how much you might be able to afford. You’ll be able to see the monthly mortgage repayments you’d have to make for each deal, and if you click on ‘Product Details’, you’ll find more information on any extra moving fees you’d have to pay.
The comparison tool doesn’t take into account your financial situation or your credit history, so it’s important to remember that your monthly repayments and deal rates could change when you apply for a mortgage in principle and a mortgage offer.
Your home may be repossessed if you do not keep up repayments on your mortgage