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Moving to a new home can be an exciting adventure, but it often comes with a complex web of financial decisions, especially when you're in the middle of a fixed-rate mortgage. What if you could take your current mortgage with you to your new property, maintaining the same interest rate and features? Well, that's where the concept of "porting" comes into play.
What Is Porting?
Porting your mortgage essentially allows you to transfer your existing mortgage deal to your new home. This means you can keep your current interest rate and any related features, even if you're relocating. While it might sound like a straightforward solution, there are essential factors to consider before deciding to port your mortgage.
When Does Porting Make Sense?
Porting is particularly advantageous if you're on a fixed-rate, long-term mortgage deal, especially one with early repayment penalties. Contrary to popular belief, you don't have to wait until the end of your fixed-rate period to port your mortgage. Many lenders offer this option, so you can sell your existing property and purchase a new one while keeping the same mortgage.
What Can You Do When Porting Your Mortgage?
Depending on your lender, you might have the flexibility to do the following:
1. Move All or Part of Your Mortgage: In some cases, you can port your entire mortgage to the new property.
2. Borrow More If Needed: If your new home requires additional funds, you may have the option to borrow more. However, this usually means taking an additional mortgage at the current rate when you apply.
Consider Early Repayment Charges (ERC)
When porting your existing mortgage deal, be aware that Early Repayment Charges (ERCs) may apply. These charges often come into play when you're only porting part of your mortgage or if there's a delay between selling your existing property and purchasing the new one. It's essential to check with your lender about any potential ERCs.
The Decision in Principle (DIP)
Before you embark on porting your mortgage, you'll typically need to obtain a Decision in Principle (DIP) from your lender. A DIP outlines what your lender would be prepared to lend you for your new property. Please note this may involve a credit check.
Not All Mortgages Can Be Ported
Remember that porting your mortgage isn't an option for all types of mortgages. It's crucial to review your latest mortgage offer or consult with your lender or mortgage advisor to determine if porting aligns with your specific circumstances.
In conclusion, porting your mortgage can be a valuable tool when moving to a new home, especially if you're in the middle of a fixed-rate mortgage. However, it's essential to carefully consider the terms, Early Repayment Charges, and whether porting suits your needs. Always consult with your mortgage advisor for personalised guidance tailored to your situation.
Ready to explore your porting options? Contact us at NEST today for expert advice and assistance with your mortgage porting journey.
Think carefully before securing debts against your property. Your home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
