Home Mover Mortgage Advice

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Home Mover Mortgages – Choosing the right option for you

When you decide to move home, a wide range of important decisions need to be made, one of the most significant is determining how you’ll manage the mortgage for your new home. At LK Mortgage & Finance, we’re here to assist you in exploring the various options available for your Home Mover mortgage needs.

What does Home Mover mean?

A Home Mover is simply a mortgage customer that is either porting (transferring) their existing mortgage to a new home or settling their existing mortgage with the proceeds of the sale of their old home and then using the remaining cash as a deposit to then take a new mortgage on their new home.

What is porting?

Porting is simply the word used to describe the process of transferring your current mortgage to a new property. It means you retain your existing mortgage deal when moving to your new home. One major advantage of porting is potentially avoiding early repayment fees, which can be 5% of the total loan amount.

However, porting isn’t without its downsides. It can still involve arrangement fees and valuation costs, and your lender may reevaluate your eligibility based on their affordability criteria. Additionally, changes in your earnings or credit rating since the inception of your mortgage could lead to application rejection. Also, if you are moving into a home that is of a different value to the home you are selling, you may not be able to port your existing mortgage, and you may not want to as there could be a better deal available.

Can I increase the mortgage size when I port?

Increasing the loan amount during a port may be possible, especially if you’re purchasing a higher-value property. This possibility depends on your lender’s criteria and your current financial circumstances. Alternatively, some lenders might permit porting while requiring a separate mortgage for the additional amount, resulting in two separate mortgage products with the same lender.

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Can I decrease the loan when I port?

When downsizing to a smaller property, porting is generally possible. Most lenders will agree to this, but be aware that reducing the mortgage amount by more than 10% might incur early repayment charges. However, if you are significantly downsizing you may get a better deal by remortgaging.

What role does the value of my current home play in my choices?

If you have substantial equity in your current home, your mortgage options tend to be favourable. Good equity often stems from paying down a significant portion of the mortgage or witnessing an increase in the property’s value. A lower Loan-to-value ratio translates to improved interest rates and a wider array of lender choices. In contrast, if you have low or negative equity, where your mortgage balance exceeds your home’s value, lenders are less inclined to facilitate porting unless you’re downsizing.

What impact does the value of the new home have?

When transitioning to a more expensive property, you must meet the lender’s affordability and credit score criteria for the new loan amount, regardless of whether you’re porting or remortgaging. It’s important to use a mortgage calculator early in the process to understand the affordability of your monthly payments. Downsizing to a smaller home is generally more straightforward, as it doesn’t involve borrowing additional funds.

How do I know if porting is right for me?

Contact your lender to see if porting is viable for your mortgage agreement and understand the associated implications. Subsequently, take a comprehensive look at both porting and remortgaging options, considering early repayment charges, arrangement fees, monthly payments, and mortgage rates. While this process may seem intricate, a Mortgage Broker can simplify it for you.

How can a Mortgage Broker help with a Home Mover mortgage?

At LK Mortgage & Finance, we aim to simplify the process of moving home. We’ll discuss your specific circumstances and property objectives in detail, exploring lenders and products tailored to your needs.

Our mortgage advisers can secure an Agreement in Principle from a suitable lender, which is vital when making an offer on a new property. We’ll guide you through each step of the mortgage application process until your purchase is finalised.

We operate under the regulation of the Financial Conduct Authority, and our London-based office is open Monday to Friday. Reach out to us today to discover how we can simplify your Home Mover mortgage journey.