Porting a Mortgage to a new Property?
The majority of High Street mortgages which are on the market are portable. A portable mortgage is simply a mortgage that you are able to move from one property to another without paying a penalty. This works out well if you are considering moving to a new house and are currently in the middle of a fixed rate deal because you can potentially avoid an early repayment charge.
Are all Mortgages Portable?
It’s important to remember that not all mortgages are portable. If you are with a Specialist Lender then you may not have the opportunity to port your mortgage. The best way to find this out is to drop a quick call to your Lender to confirm whether or not this is allowable.
Should I port my Mortgage?
Even with the availability of porting being available, not all customers choose to do so. Some reasons as to why customers don’t port could be due to factors including Lenders not lending the extra money that a person needs to move or that the additional funds will be on a different rate to the one you have on your current deal. Depending on what new new deal you are offered you might decide to overlook the repayment charge and swap to a different lender.
What is a Sub Account?
A sub-account will be created onto your mortgage when you port your mortgage and the additional monies end up being on a different deal to the original one. This means that although you only have one mortgage and one direct debit, two different rates of interest apply.
Down the line having sub accounts will lead to the different products overlapping which could get annoying. To get them back aligned at some point will mean one of the sub-accounts having to go onto the lenders’ standard variable rate for a period of time.