Porting or Remortgaging: Which Option is Best When Moving House?
When moving to a new house, homeowners must decide whether to port or remortgage their existing mortgage. This decision can have significant financial implications, so it’s important to understand the differences and benefits of each option.
Porting
Porting involves repaying your current mortgage and taking out the same terms with your current provider. This option is beneficial if you’re in the fixed term period of your existing mortgage and on an excellent deal with low-interest rates and great terms. However, porting may not be ideal if you’re moving to a more expensive property, as you may need to apply for a larger amount and the lender may reject your application if you can’t meet the affordability requirements.
Remortgaging
Remortgaging, on the other hand, is when you take out a new mortgage deal with a new lender. This option is ideal when your current mortgage fixed term deal has ended, as you could significantly reduce your long-term mortgage costs by finding a new provider. However, if you want to remortgage before your current fixed term deal ends, you’re likely to face hefty charges, which can be up to 5% of the remaining loan amount.
It’s important to seek expert advice from a mortgage adviser before making any decisions. They can provide impartial advice and recommendations to help you find the most suitable option and mortgage deal for your circumstances.
To apply for porting or remortgaging, you’ll need to pass credit and affordability checks before lenders agree to provide a home loan. It’s also important to consider the costs associated with each option, including early repayment charges, arrangement fees, and charges for your new home loan.
Conclusion
Homeowners have two options when considering a move with an existing mortgage: porting or remortgaging. Both options have their benefits and drawbacks, so it’s important to seek expert advice to determine which option is most suitable for your situation.
Common questions about porting and remortgaging
Porting is a process of transferring your existing mortgage to a new property when you move. You will need to repay your current mortgage and take out the same terms with your current provider for your new property.
Remortgaging is when you take out a new mortgage deal with a new lender. The new lender will pay off your old mortgage, and you will be responsible for making monthly payments to the new provider.
When remortgaging, you can potentially save money in the long term by finding a new provider as part of your home move process. However, if you choose to remortgage before your current fixed term deal ends, you may face early repayment charges, which can be up to 5% of the remaining loan amount.
No, porting requires you to stay with your current lender, and you’ll need to meet their affordability criteria.
Yes, you can port your mortgage if you’re moving to a more expensive property. However, you’ll need to meet your lender’s affordability criteria and may need to apply for an additional loan if you need to borrow more than your original mortgage amount.
Yes, you can remortgage before your fixed-term deal ends, but you’re likely to face early repayment charges, which can be up to 5% of the remaining loan amount. It’s important to consider these charges when deciding whether to remortgage early.
