Porting a mortgage is a permission, not a right

What follows is an argument about porting a mortgage, and about where the received version of it stops being true.

What porting actually involves

A portable mortgage allows the existing rate and terms to be carried to a new property when you move. It is not a transfer of the same loan so much as the repayment of one and the creation of another on matching terms.

Because a new property and new circumstances are involved, the lender assesses the application afresh. That means affordability, credit assessment and valuation all apply again, using whatever criteria are current rather than those at the original application. The feature is therefore better described as an option to apply on existing terms than as a guarantee.

Why an application can fail

Lending criteria tighten and loosen over time, so an application acceptable years ago may not meet current standards. Changes in employment status, particularly a move to self-employment, frequently affect the assessment. The new property itself can be the obstacle, since some construction types, tenures and locations are lent against reluctantly.

Practically, affordability calculations also change, and a household borrowing the same amount can be assessed as unable to afford it. None of these is unusual, which is why treating porting as certain is a mistake when planning a move.

The cost of a decline

If porting is refused and the mortgage is repaid on sale, any early repayment charge on the existing deal usually becomes payable. That charge is typically a percentage of the balance and can be substantial on a large mortgage early in a fixed period. Some lenders refund the charge if a new mortgage is taken with them within a short window, but this is a policy rather than a rule.

Establishing the exact position with the lender before committing to a purchase avoids a large unbudgeted cost. The terms are in the mortgage offer, and they are one of the few clauses with a directly calculable consequence.

Borrowing more at the same time

Most moves involve borrowing a different amount, and any additional borrowing is priced at current rates rather than the ported rate. The result is a mortgage in two parts with different rates and often different end dates, which complicates later switching.

Aligning the end dates where possible avoids being locked into one part while the other reverts. Where the new mortgage is smaller, part of the original may be repaid, which can itself trigger a proportionate charge.

Asking the lender to illustrate the resulting structure in writing is reasonable and clarifies what is actually being agreed.

Timing and simultaneous transactions

Porting generally requires the sale and purchase to complete on the same day, since the loan is repaid and redrawn. Where completions cannot be aligned, some lenders allow a gap of a limited number of days, but the terms vary.

A break longer than permitted means the mortgage ends and the rate is lost, which changes the arithmetic of the whole move. This is one of the practical reasons chains and timing matter beyond the inconvenience. Confirming the permitted gap with the lender early gives the transaction a constraint everyone can plan around.

Deciding whether it is worth it

Porting is valuable when the existing rate is well below current pricing, and close to irrelevant when it is not. Comparing the ported arrangement against a fresh mortgage elsewhere, including all fees, is the only way to see which is better. A rate worth protecting can justify accepting other constraints; a rate no better than the market should not dictate the move.

For most households, mortgage rules, product features and charges differ substantially between countries and change over time. This is general information about how porting works and not advice about any mortgage or property decision.

The takeaway

Confirm in writing what happens if the application fails. The rate is only portable if the lender says yes on the day.

Costs compound as reliably as returns do, and in the same direction.