Moving House

Moving house is exciting but it can also be a stressful time. Whether you’re moving to your dream home or having to downsize, it’s important to get the right mortgage for you.

Mortgage options when moving house

In short, when you are moving house, you can either look to move your current mortgage over to a new property (and borrow more from the same lender if needed), or take out a new deal with another lender.

Porting your mortgage

Porting is when you move your existing mortgage to a new property. You get to keep the current rate on your existing balance. If the property you are buying is more expensive and you need to borrow more, any new borrowing will be based on rates available at the point of application.

You still need to apply to port your mortgage, meaning you need to pass credit and affordability checks. Not all mortgages are portable, either, so check your mortgage offer or speak to your lender to find out if yours is.

Porting is a great option if you have a low rate that you don’t want to lose, or if you have a big early repayment charge you’d rather not pay. It is important to note that some lenders will still charge if you are downsizing and need to borrow less than you currently owe.

Getting a new mortgage

You might want to consider getting a new mortgage if:

• you aren’t tied into an existing deal
• your current mortgage isn’t portable
• you need to borrow more and your current lender won’t let you
• you don’t pass the credit check with your current lender
• it would make you financially better off

There may be an early repayment charge and exit fees to pay for cancelling your existing mortgage. This can be thousands of pounds, so it’s important to factor that in.

Using a mortgage broker can be really beneficial. It gives you access to more products and more lenders, and the broker will do all the research and application paperwork for you. It’s important to review available products with other lenders, not just your current one, so you can be sure you’re getting the right deal for you.

Upsizing

Upsizing means buying a bigger house than the one you currently have.

If you need to borrow more on a mortgage in order to do this, you’ll have to prove to a lender that you can afford the monthly payments. You should also look closely at your finances to make sure you can afford the living costs associated with the new house. For example, if it’s bigger it might cost more to heat, or if it’s further away from work, travel costs are likely to go up.

You should also review your insurance policies if your borrowing is increasing.

Downsizing

Downsizing means moving to a smaller house than the one you currently have.

You might have a good amount of equity in your current property, meaning you only need a small mortgage. You may even be lucky enough to be able to buy a new property outright!

Negative equity

Being in negative equity means owing more than the house is worth. If you sell, proceeds from that sale wouldn’t be enough to repay the debts in full. You would therefore need to find money from another source to make up the difference.

You would also need to find a deposit from elsewhere for a new mortgage.