Moving home: how the mortgage side works
Moving home isn't your first time, but it's probably been a few years and a lot has changed. Lenders look at affordability harder than they used to, the rate you're on now may look very different from what's available, and your existing mortgage is part of the puzzle.
“I don't want a new mortgage and I don't want to pay an early repayment charge”
It's the thing I hear most from people thinking about moving, so let's deal with it first.
An early repayment charge is a fee your lender can charge if you pay off or leave a fixed deal before it ends. It's set out in your mortgage offer, and it's usually worked out as a percentage of what you still owe.
Porting means asking your current lender to move your existing deal to the new property. It isn't automatic. The lender treats it as a new application: they check affordability again, they need to be happy with the new property, and they can say no. If they agree, the amount you already owe carries on at your current rate for the rest of the deal, and you don't pay the charge on it.
If the new home costs more, the extra borrowing is usually a separate part of the mortgage on whatever that lender offers on the day. That can leave you with two parts ending at different times, which needs managing later.
The alternative is to pay the charge and start fresh with a new deal on the whole amount. Sometimes that costs more, sometimes less over the years that follow. It depends on your balance, how long is left on your deal, the size of the charge and what's available when you move.
The only wrong answer is picking one without running both. That's what we do together, with your real figures, before you decide.
The four numbers
Your equity
The difference between what your home is worth and what you owe on it. That's your deposit on the next one.
Your income
What comes in against what goes out, looked at harder than a few years ago.
Your credit file
Lenders check it again every time, however long you've had your current mortgage.
Your existing mortgage
The balance, the rate, when the deal ends, and any early repayment charge. This decides whether porting is worth looking at.
Managing the chain
The biggest difference second time round is the chain: your buyer, you, your seller, and whoever they're buying from, all depending on each other.
Two things I learned advising inside an estate agency. The highest offer on your home isn't always the right one to accept; a buyer with a verified decision in principle and no chain behind them is often the safer sale. And until exchange, nothing is binding, so the thing that keeps a chain alive is regular contact between solicitors, agents and people.
If your buyer pulls out, it isn't game over. Find out why in the first couple of days, talk to your seller early, and remember a mortgage offer usually lasts long enough for a new buyer to be found.
What I'll need from you
Your latest mortgage statement, so I can see the balance, the rate and any early repayment charge. Payslips or tax figures, three months of bank statements, photo ID and proof of address. Once you've accepted an offer on your home, the memorandum of sale.
What happens next
A conversation of 30 to 45 minutes, a budget built together, a proper porting-or-fresh comparison, and where possible a decision in principle on verified income before you view. Once your offer is accepted, we meet again to go through the recommendation and the protection, and my administrator works alongside me from application to completion, aiming for a written update every Friday.
A word on protection
Every move is a moment to look at your cover again. The mortgage is usually bigger, and life has probably moved on since you last set it up. Sometimes the answer is keep what you have. Sometimes it's top up. I'll show you the gap, if there is one, and you decide.
“Great service, we find moving house very daunting so good to have someone who knows the process and is knowledgeable and can ask advice to. Works around our availability :)”
Questions home movers ask me
Can I take my current mortgage with me?
Often, if your deal is portable and your lender agrees to the new application. It's a fresh affordability check, not a formality.
Will I have to pay an early repayment charge?
Only if you leave your deal before it ends and don't port it. If you port, the charge usually doesn't apply to the amount you carry across. We check your offer document together.
Can I borrow more when I move?
Usually, if the affordability checks allow it. With porting, the extra is often a separate part of the mortgage on the lender's current terms. With a fresh deal it's all in one.