Why porting a mortgage might be right for you when moving to a new home

Independent

28-03-2025

SPONSORED BY TRADING 212
The Independent Money channel is brought to you by Trading 212.
Nevermind the sofa and the fridge - have you thought about taking your mortgage rate with you when you move home?
If you were lucky enough to lock in a cheap deal before mortgage rates went through the roof, and don't want to lose it when moving, your lender may allow you to transfer it to a new property. This is known as 'porting.'
It means you get to stay on your lower rate for longer, rather than having to pay today's prices - as while interest rates are expected to come down across 2025, they are still significantly higher than three or four years ago.
However, porting is not quite as straightforward as it sounds and there are both pros and cons to consider.
Here is what you need to know about porting your mortgage when moving home.
Why might you port a mortgage?
There are two main benefits to porting your mortgage. First, it lets you hold onto a cheaper mortgage rate (on the portion you are transferring) for as long as possible.
When porting, you are moving the value of your existing mortgage, and its agreed rate, over to a new property.
This can be useful if you still have time left on a low fixed rate, for example of one to two per cent from pre-2022 - or even simply if you have a mortgage which is locked below the rates now available. Although rates are slowly coming down, they are still high relative to previous years.
You will still have to pass a new mortgage application with your current lender and might also need a second product if your new property is more expensive and you're borrowing more.
But even if this is the case, it could still be more affordable than taking out a new mortgage for the full amount.
For example, the average five-year fixed rate in March 2025 is 5.18 per cent, according to consumer site Which?, compared to just 2.74 per cent in March 2022.
Therefore, you could keep a lower rate on the portion you're moving over, instead of paying a new higher rate on all of it. The overall difference this makes to you will depend on how long is left on your existing term.
Paul Spencer-Nixon, principal partner at Fingerprint Financial Planning, says: 'There are still plenty of people on good mortgage deals from the low rate environment post-Covid. Porting can enable them to hold onto a good deal rather than face an interest rate that could quite easily now be double. Doing this keeps the nice low rate, and any additional borrowing would be at a rate available today.
'However, it's also important to consider what the monthly payments will be once the cheaper rate ends so there aren't any nasty surprises or problems later on.'
Second benefit: avoiding fees
Additionally, by sticking with your existing deal when you move, you also save on any Early Repayment Charges (ERCs) that could otherwise be due.
Avoiding ERCs can also be a significant saving, as they typically range from one to five per cent of what you still owe.
On the average UK mortgage balance of £132,000, this equates to between £1,320 and £6,600.
Spencer-Nixon said: 'Depending on the balance of your mortgage, ERCs can be expensive. Even if interest rates were equal, it comes down to the maths of the current rate you are on versus any exit fees you would have to pay if you didn't port. Sometimes it's better to have a slightly higher interest rate rather than pay thousands of pounds in penalties. Other times it's not.'
It's important to get a full picture of what you would be paying in both scenarios: if you opt for porting, and if you simply get a new mortgage for your new home.
What are the cons of considering porting?
Those are the two principle benefits - but there's still more to consider.
Even if your lender allows porting (and not all do), this doesn't mean you have an automatic right to move your mortgage.
You will have to go through affordability checks again, which you might not pass even though you did the first time. Any recent drops in income, credit blips, or even having had more children can go against you. Whether you are accepted will also depend on the value of the property you're buying and how much your lender is willing to cover: the loan-to-value.
Another drawback could hit you later down the line, if you are having to take out a second loan to cover the shortfall on a more expensive home which may not end at the same time as your existing mortgage.
Spencer-Nixon said: 'You need to factor in potentially having two parts to your mortgage that will end at different times. This can be complicated to tidy up in the future and could incur extra costs such as a temporary higher variable rate or additional arrangement fee.'
Porting also means likely being locked in with your existing lender for the second product, which can potentially mean missing out on better deals elsewhere. Again, it's important to have all the details and work out your costs accordingly before reaching a final decision.
How to port your mortgage
Check the terms and conditions of your original mortgage offer to see if it's portable
Review your current financial circumstances and whether you are likely to still be eligible for the deal
Check rates for any additional borrowing with your lender and calculate if you can afford it. Take into account how much your monthly payments could go up once your cheaper rate ends
Consider asking a mortgage adviser to help you work out if it's cheaper to port or pay any exit fees and take out a new deal
Prepare application documents, such as bank statements and payslips or two years of accounts if you're self-employed
Submit your application and wait to see if you're approved. You will usually have between three to six months to accept a mortgage offer, depending on the lender.
When investing, your capital is at risk and you may get back less than invested. Past performance doesn't guarantee future results.