What to consider before transferring or changing your mortgage
Moving home often brings a fresh set of mortgage questions. Even if you already have a mortgage, buying another property usually means reviewing what you owe, what your current deal allows, and how much you may need to borrow for the next home.
Your existing mortgage does not transfer automatically. Depending on your lender, product and circumstances, you may be able to transfer your current deal, borrow more, switch to a new mortgage or repay the existing loan when the sale completes.
Starting with your current mortgage
The first step is to review your existing mortgage. This includes your outstanding balance, current interest rate, deal end date, monthly payment, and whether any early repayment charges apply.
You should also check whether your mortgage is portable. A portable mortgage may allow you to transfer your existing deal to a new property, subject to the lender’s approval. This can be useful if your current rate is lower than the deals currently available.
How porting works
Porting means taking your current mortgage product with you when you move. You are not simply transferring the loan without checks. The lender will still assess your income, spending, credit profile and the new property before agreeing.
If the new property is more expensive, you may need to borrow more. The additional borrowing may be placed on a separate product with the same lender, often at a different rate. This can mean having two parts to your mortgage with different end dates.
When a new mortgage may be better
Porting is not always the right answer. If your lender cannot support the new borrowing amount, the property does not meet their criteria, or the extra borrowing is expensive, a new mortgage with another lender may be worth comparing.
A new mortgage can also make sense if your current deal is nearing its end or if the early repayment charge is small relative to the potential benefit of switching. The key is to compare the full cost, not just the monthly payment.
Using equity from your sale
When you sell your current home, any remaining equity can usually be applied towards the next purchase. Equity is the difference between your property’s sale price and the outstanding mortgage balance.
If your home has increased in value or your mortgage balance has decreased, you may have more equity than when you first bought. This can help increase your deposit for the next property and may improve your loan-to-value position.
Borrowing more for the next property
Many movers need a larger mortgage when buying a more expensive home. The lender will assess whether the new borrowing is affordable, even if you have managed your current mortgage well.
They may consider your income, household spending, debts, dependents, credit history and future commitments. A larger home can also mean higher bills, council tax, insurance and maintenance costs, so it is important to think beyond the mortgage payment.
Selling and buying at the same time
Most home movers sell and buy as part of the same chain. Your existing mortgage is usually repaid from the sale proceeds, and the new mortgage starts when the purchase completes.
This means timing matters. Your solicitor, lender, estate agent and buyer’s solicitor need to work together to ensure the sale and purchase complete smoothly. Delays can occur, so it helps to have your mortgage position checked early.
Planning before you offer
Before making an offer on your next home, it is sensible to understand how much you can borrow and whether your current mortgage imposes any restrictions. This can help you avoid offering on a property that may not work financially.
Moving home can be exciting, but the mortgage side requires careful planning. Reviewing your current deal, comparing your options and checking affordability early can help you move forward with greater confidence.
A home move is the right time to review how your mortgage fits your next step
Before making an offer, we can help you check whether porting, borrowing more, or arranging a new mortgage gives you the clearest route forward. To discuss your mortgage options, speak to Burlington Financial, telephone 01262 674988, or email enquiries@burlington-financial.uk.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. THIS ARTICLE IS FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE PERSONAL FINANCIAL ADVICE. MORTGAGE AVAILABILITY, RATES AND CRITERIA DEPEND ON YOUR INDIVIDUAL CIRCUMSTANCES AND LENDER REQUIREMENTS. THE INFORMATION CONTAINED WITHIN THIS ARTICLE WAS ACCURATE AT THE DATE OF PUBLICATION AND IS SUBJECT TO CHANGE.
