Mortgage porting explained
Before getting a mortgage, you should ensure you have considered if the mortgage is portable or not and on what terms.
Porting is the process of moving your mortgage from one property to the other.
Although the process is described as such, porting usually involves paying off your mortgage with the sales proceeds of your home and then starting a new mortgage on your new property with the same terms.
Porting your mortgage might not always represent the best value so be sure to shop around for a new mortgage first.
What fees are involved with mortgage porting?
Porting your mortgage avoids most but not all of the typical mortgage origination fees but you may also be liable for an early repayment charge if you are still within your introductory rate period although most mortgage lenders will waive this if you port your mortgage.
You may also be liable for an exit fee and new mortgage origination fees based on your mortgage lender but these fees could be waived as well if you port your mortgage.
Will I qualify for mortgage porting?
You might not qualify for mortgage porting if your credit score is low or your general mortgage affordability isn't at a satisfactory level.
It is worth checking your current mortgage affordability before applying to port your mortgage.
If you find that you won't qualify then it is best to boost your mortgage affordability before applying to port to avoid a rejection.
You can always port your mortgage to a cheaper property or a more expensive one but this will be all based on if you pass the mortgage lenders affordability check for the amount you want to mortgage.
If you want to move to a more expensive property and your lender refuses to loan you any more than you currently borrow you might need to find the extra amount and pay it down as a deposit.
Mortgage porting isnt a must, you could also use a mortgage broker to find more suitable mortgage lenders that may be willing to lend to you.
Why you may not be eligible for mortgage porting:
The lenders affordability criteria has changed
The lender cannot borrow you more as it has reached its individual lending limit
The lender can port you but you will have to get a second mortgage to fill the gap on the more expensive home you want to move to. Be aware that if the introductory periods of both mortgages end at different times; your monthly payments will sharply increase at different times.
You might be able to borrow from your current lender but at a higher rate due to economic situations changing since your initial mortgage.
**When porting your mortgage it is always advisable to seek the services of a credible mortgage broker.