Moving home mortgage rates

Moving home mortgages explained

What happens to my mortgage if I want to move house? What are the options?

After making the decision to move home, you’ll be faced with a further choice as to what to do with your mortgage. Whether you want to keep your current deal or would prefer to secure a new one, we explain your options below:

Porting your existing mortgage

If you’re happy with the interest rate and features of your current mortgage, you may be able to transfer it to your new property via a process known as ‘porting’.

Porting your mortgage can have the added benefits of saving time spent searching for a new deal and reducing the amount of paperwork you need to complete (as your lender should have most of your details on file). It may even prove less costly, as you can avoid expensive exit or early repayment fees.

However, bear in mind not all mortgages can be ported, so you’ll first need to check with your lender.

Taking out a new mortgage

Alternatively, you could consider a new mortgage – particularly if more competitive rates or better incentives are available. This option may also be the most straightforward if you need a larger loan to cover a more expensive property.

It involves using either savings or the proceeds from the sale of your property to pay off your existing mortgage before taking out a new deal on your next home.

A downside is you may be stung by charges; not only will you have to pay the product fees associated with your new deal, but you’ll also need to budget for any early repayment charges (ERC) and/or exit fees (when moving to another lender).

Does it matter if my new home differs in value from my existing home?

A change in circumstances is a common reason why people move home; you may need a larger property to accommodate a growing family, for instance, or maybe you’re looking to downsize after your children have flown the nest.

In both cases, it may be that the value of your current property differs from that of your prospective home; find out how you could borrow more (or less) below:

How to get a bigger mortgage

Moving to a more expensive property? There are a few options to consider if you need to borrow more money:

• Increase your current mortgage: In some cases, a lender may allow you to increase the size of the loan while keeping your current deal.

• Take out a second mortgage: If you’re unable to top up an existing deal, a lender may instead offer a second mortgage at a different rate to cover the difference. But keep in mind this would potentially leave you with double the amount of admin and fees.

• Secure a new deal: Another option is to pay off your current mortgage and take out a new, larger loan. Remember, this may incur exit or early repayment fees.

All of these options, however, rely on you passing affordability checks and a lender being willing to offer a bigger loan.

Find out how much you may be able to borrow with our mortgage calculator.

Moving to a cheaper property?

While porting your existing mortgage and getting a new deal are also both options when it comes to moving to a less expensive property, your choice may be impacted by what size loan is needed.

• Increasing the loan-to-value (LTV): A lender may not allow you to port your existing deal when moving to a cheaper home if doing so would exceed its maximum LTV (the amount borrowed versus a property’s overall worth).

For instance, if your mortgage currently caters for up 60% LTV and you wanted to borrow £180,000 towards a property valued at £230,000, you’d need a mortgage that could finance a higher, 80% LTV.

Our loan-to-value calculator could help to work out what LTV ratio you need.

• Reducing your loan: Similarly, some lenders won’t let you port your mortgage if you’re looking to considerably reduce the size of the loan. Nevertheless, where a lender does allow you to transfer your mortgage to a cheaper property, bear in mind you may have to pay an ERC on the portion of the loan no longer needed.

• Buying a new home with the equity in your current property: It may be the case you have enough equity in your current property to cover the cost of your new home; again, you may be faced with an ERC if you have any outstanding loan to pay off.

Should I stay with my current lender or switch to a new one?

To recap, there are several factors to consider when deciding whether to stay with your current lender or switch to a new one. Ultimately, though, the best choice is likely to be that which proves most cost-effective – not only accounting for the interest rate, but also any additional fees, charges and incentives.

Still unsure? Our guide on whether to switch mortgage lenders offers more information. Or seek advice from an expert mortgage broker.

Should I speak to a broker?

Speaking to a broker could remove a lot of the hassle involved with getting a mortgage, while also gaining you access to exclusive products and rates that aren’t available direct to the public.

Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to obtain specific qualifications before they can give advice.

For more information, read our guide on whether to use a mortgage broker.

Speak to an award-winning mortgage broker today:

How to find the best deal

Whether you’re a seasoned homemover or are moving home for the first time, it’s good practice to regularly compare mortgage deals.

Importantly, you shouldn’t consider only the rate, as the lowest-priced deal may not necessarily be the most effective. Instead, be sure to take note of other factors such as product fees, incentives, the length of the initial term and whether a deal comes with any flexible features.

Most of this information can be found easily by selecting ‘view further details’ next to a listing on our charts. Alternatively, read our weekly mortgage roundup for a more in-depth overview of those products offering the lowest fixed rates, as well as some Moneyfacts Best Buy options which feature based on their overall true cost.