A home mover is when you have a mortgage on your current home and plan to move to a new property. You don’t necessarily need to change your mortgage in order to move home, but you have the option to do so.
What is Porting?
If you choose to remain on your current mortgage when you move to a new home, you may be able to port your mortgage. Most lenders are able to transfer your mortgage to the new property for you, which is called porting.
When your mortgage is ported, a new mortgage application is required. This is to determine if you will be accepted or declined based on your current circumstances which may be different to when you first took out the mortgage.
You will need to pay valuation fees and stamp duty on your new property at the time of application. If your new property requires that you increase your loan amount, you may have to take out an additional mortgage, as well as the ported one. This can be quite expensive, and you may find that it’s better to look at a remortgage.
Purchasing with your Current Lender
Whilst you can choose to remortgage with your current provider, it’s unlikely they will be able to provide a significantly lower interest rate than you are currently paying. You won’t necessarily avoid paying early repayment fees by staying with the same lender. Unless you’re on a SVR (standard variable rate) mortgage, most lenders will still charge fees to get out of your current mortgage deal, even when you stay with them.
Purchasing with a New Lender
If you choose not to port your mortgage, remortgaging with another provider has the greatest chance of saving you money. You can apply for a remortgage to pay off your current mortgage and borrow enough to purchase your new home. You also have the option to pay off your existing mortgage through the proceeds of its sale but bear in mind, that this may leave you liable for early repayment fees.
How your Current Home Value Affects your Options?
If your current property has risen in value, it is usually possible to upsize to a higher valued property. If your home hasn’t risen in value, you will need to prove that you can afford the increased repayments on your mortgage.
This has the potential to save you the most money and may suit some homeowners, especially where children have left home. If you raise enough from the sale of your current home, it may be possible to purchase a cheaper new home outright.
If your home is in negative equity (you owe more than your home is worth), it’s very unlikely that an application for remortgage will be accepted by any lender.