Home mover mortgages

The three choices when you move

When you move you are choosing between three things: taking your existing mortgage with you, which is called porting; repaying the existing mortgage and taking a new one, either with the same lender or a different one; or some combination, where the existing loan is ported and a further advance sits alongside it.

Which is right depends on the rate you are on, whether an early repayment charge applies, how much you need to borrow, and — crucially — whether you would still be accepted today. That last point is where the trouble is.

Porting, and why it is not automatic

Porting sounds administrative. It is not. Almost every lender treats a port as a fresh mortgage application: a new credit search, current income evidence, current affordability rules, current criteria, and a valuation of the new property. What travels with you is the interest rate and product terms, not an entitlement to the loan.

The practical consequence is uncomfortable. Someone who has paid a mortgage without fault for years can be declined on the same loan amount, or on a smaller one, because their circumstances or the lender's rules have moved. The cases we see most often involve a move into self-employment, a reduced or restructured income, a new dependent, a car finance agreement taken out since, or simply a lender that has tightened how it treats bonus or commission.

Porting is not portable

Porting is not a transfer, it is a fresh application against today's criteria — which is why people who have comfortably afforded their current mortgage for years are sometimes declined on the same loan, or a smaller one, on the house they have already offered on.

There are two other things about porting worth knowing. The property itself must be acceptable to that lender, so a port can fail on the new house rather than on you. And porting usually has a time limit — most lenders require the sale and the purchase to complete simultaneously, or within a defined window, so a broken chain can cost you the rate as well as the house.

Early repayment charges

If you are inside a fixed or discounted period, repaying the mortgage will usually trigger an early repayment charge. This is the single largest avoidable cost in a move, and it is where we see people make expensive assumptions.

Structures differ. Some charges step down each year of the product period, so the cost of leaving falls the longer you stay. Others are flat for the whole period, so waiting achieves nothing at all until the day the product ends. Some lenders will refund the charge if you take a new mortgage with them within a set period after redemption; others will not.

Do not rely on a general rule here. Read the early repayment section of your own mortgage offer, or send it to us and we will read it with you. Two clients with the same lender and the same rate can have entirely different charging structures depending on when they took the product out.

Borrowing more on the next house

Most movers are trading up, which means a larger loan. That larger loan is assessed against today's affordability rules on your current income and current commitments, and it is assessed by the lender you are applying to rather than the one you have been paying.

Where you port and need more money, you may end up with two parts on one mortgage: the ported product at its original rate and end date, and a further advance on a new product with a different rate and possibly a different end date. That is workable, but it needs thinking about, because misaligned end dates mean you cannot easily remortgage the whole balance later without one part incurring a charge. We line the dates up wherever the numbers allow it.

• Check whether the existing product's end date can be matched by the new part
• Compare the cost of porting plus a further advance against a clean new mortgage including any early repayment charge
• Consider whether the current lender's affordability rules are the binding constraint, because a different lender may be more generous
• Where you need more borrowing than income supports, look at term, at how each lender treats variable pay, and at whether the purchase should be smaller

What actually breaks a chain

Chains rarely break because of the mortgage. In our experience they break for a small number of recurring reasons, and knowing them is how you protect yourself.

• A down valuation somewhere in the chain, so one buyer suddenly needs money they do not have
• A leasehold problem: a short lease, missing freeholder information, a large forthcoming service charge or cladding paperwork that has not been produced
• A survey finding that leads to a renegotiation, which one party refuses
• A buyer at the bottom whose finance was never as firm as the agent believed
• Someone in the chain who cannot exchange because their own purchase has not caught up, and a party above who will not wait
• Source-of-funds enquiries on a gift or an overseas transfer that take longer than anyone allowed for

What you can control: get your own application to formal offer as early as possible, chase your solicitor's enquiries rather than assume they are moving, and ask the agent direct questions about the position at the bottom of the chain. A chain moves at the speed of its slowest link, and the slowest link is usually not the one being asked about.

Using bridging finance to break a chain

Where the house you want will not wait for the sale of the one you are in, short-term lending can buy the new property first and be repaid when the old one sells. It is a genuine solution for a small number of cases — a probate sale, an unrepeatable property, a chain that has collapsed a week before exchange — and it is the wrong answer for most people who ask about it.

The test is the exit. If your current home is realistically saleable and you are prepared to price it to sell, a bridge has a defined end. If the sale depends on getting an optimistic price, the bridge has no reliable exit and the cost keeps running. We would rather tell you that before you commit than afterwards.

Regulation, stated properly. Most bridging finance is not regulated by the Financial Conduct Authority, and it is short term and more expensive than a mortgage. But it is regulated where the loan is secured against a property you or an immediate family member live in or intend to live in. Which of those applies to your case changes the protections that come with the loan, and we confirm which applies before you commit to anything.

Timing the two sides

The mortgage offer on your purchase has a validity period, and so does the rate. If the chain slips, the offer may need extending or, in some cases, re-underwriting, which means fresh documents and another look at your credit file. Lenders are generally reasonable about extensions, but they are not obliged to be, and a re-underwrite is a chance for something to have changed.

For that reason we would rather apply once the offer is accepted and the chain is real, and then keep the case warm — telling you what to gather, telling your solicitor what the lender will ask for, and telling you early if the timetable is drifting towards a problem.

What we charge

Our fee is typically £495, though complexity moves it, and it is always disclosed in writing before you apply. Each stage of the fee is earned when that stage is reached and is not refundable after that point. Separately, you have the right to cancel within 14 days, as set out in our Terms of Business. We are usually also paid a procuration fee by the lender.