Moving to a new home is an exciting chapter, but it comes with several important financial considerations, especially if you have an existing mortgage. One of the most frequently asked questions by homeowners is: How does mortgage work when moving house? Whether you’re upgrading, downsizing, or relocating, understanding how your current mortgage fits into your moving plans is essential to avoid unexpected costs and delays.
In most cases, your mortgage won’t automatically transfer to your new property. Instead, you’ll need to explore options such as porting your mortgage, remortgaging, or potentially paying it off if you’re downsizing. Each option depends on your lender’s terms, your financial profile, and the value of your next home.
Here, we’ll provide clear, up-to-date information on how mortgages work when moving house, helping you make informed decisions for a smooth transition. Whether you’re staying with your lender or switching providers, proper planning can save you both time and money.
How does mortgage work when moving house?
Relocating to a new property involves more than just choosing a home—it requires careful consideration of how your current mortgage agreement will impact your next steps. Depending on your circumstances, you may be able to transfer your existing deal, switch to a new lender, or settle the balance entirely. Understanding the implications of each path is vital to ensure financial efficiency and minimize fees. Lenders will assess your situation based on affordability, loan-to-value ratios, and the property’s value. Knowing the available options and how they apply to your unique scenario will help you make the right mortgage decision during your move.
Port Your Current Mortgage
Transferring your existing mortgage to a new property—commonly known as porting—can be a convenient way to maintain your current interest rate and avoid early repayment charges. This process typically requires approval from your lender, who will reassess your financial situation and verify that the new home meets their criteria. While porting may seem straightforward, additional borrowing often triggers a second loan at a different rate. It’s important to understand your lender’s specific porting rules and any associated fees. For those with favorable fixed-rate deals and stable finances, porting offers a cost-effective and relatively simple transition between properties.
Apply for a New Mortgage
Applying for a brand-new mortgage can provide access to competitive rates and better terms, especially if your financial situation has improved or the property value is higher. This process involves ending your existing agreement and starting a new one, either with your current lender or another provider. Although this may incur early repayment charges and arrangement fees, it also opens the door to new mortgage products tailored to your current needs. Thoroughly comparing rates, lender flexibility, and repayment terms ensures you find the most advantageous offer. A new mortgage is ideal if your existing deal no longer suits your long-term goals.
Pay Off Your Mortgage Entirely
Homeowners with significant equity or planning to downsize may consider settling their mortgage balance in full during the move. Paying off the outstanding loan eliminates monthly repayments and provides financial freedom moving forward. This route is particularly attractive to those moving to a less expensive property or retiring. It’s important to review any early repayment penalties and confirm the total settlement amount with your lender. Clearing your mortgage also simplifies the transaction process, reducing reliance on lenders and streamlining legal formalities. If you’re financially prepared, this option offers long-term peace of mind and a smoother transition to your next home.
What Happens to Your Current Mortgage When You Move?
If you’re not a first-time buyer, chances are you’re still repaying an existing mortgage. So what happens to it? Here’s a helpful comparison table to explain your choices:
| Option | Description | Best For |
| Porting Your Mortgage | Transfer your current mortgage to your new home. | Those with a favorable interest rate. |
| Remortgaging | End your current deal and start a new mortgage. | Those wanting better terms or a new lender. |
| Paying Off Mortgage | Sell current property and clear the balance in full. | Downsizers with sufficient equity. |
| Let-to-Buy | Rent out your current home and buy another with a new mortgage. | Property investors or temporary relocators. |
Porting Your Mortgage
Porting allows you to transfer your existing mortgage to a new property while maintaining your current interest rate and loan terms. This is an attractive option for homeowners who are locked into a favorable fixed-rate deal and want to avoid early repayment charges. However, approval is subject to a financial reassessment by your lender, and if you’re borrowing more for the new property, the additional amount may be charged at a different rate. It’s important to understand all associated fees and conditions. Porting is best for those with stable income and good credit who wish to maintain continuity in their mortgage.
Remortgaging
Remortgaging involves closing your current mortgage and securing a new one, either with your existing lender or a different provider. This option is ideal for homeowners seeking better interest rates, updated terms, or access to more borrowing power. Although remortgaging may incur costs such as early repayment charges or arrangement fees, it can offer significant long-term savings if your current deal is no longer competitive. It’s particularly useful if your fixed-rate term is ending, your credit score has improved, or you’re moving to a higher-value property. Remortgaging provides flexibility and the opportunity to tailor your loan terms to your evolving financial goals.
Paying Off Your Mortgage
Paying off your mortgage entirely is a viable option for homeowners with substantial equity, especially those looking to downsize. This means selling your current property and using the proceeds to clear your outstanding mortgage balance. Doing so can eliminate monthly payments, reduce financial stress, and simplify the buying process for your next home. Before choosing this route, it’s essential to confirm any early repayment penalties with your lender and assess your total financial position. For individuals entering retirement or seeking to reduce financial obligations, mortgage-free living offers long-term peace of mind and flexibility in managing housing-related costs.
Let-to-Buy
Let-to-buy mortgages are designed for homeowners who wish to rent out their existing property and buy a new one to live in. This arrangement allows you to convert your current home into a rental asset while taking out a new mortgage for your next residence. It’s a practical solution for property investors or professionals relocating temporarily who plan to return later. Lenders typically require proof of rental income and strong financial standing to approve a let-to-buy setup. This approach can generate passive income while supporting a strategic property portfolio, but it also comes with tax implications and landlord responsibilities to consider.
Porting Your Mortgage: What You Need to Know
Porting your mortgage allows you to transfer your existing mortgage deal to a new property. This option can be beneficial if:
- You want to keep your current interest rate.
If your existing deal offers a low fixed or tracker rate, porting helps you maintain it when moving house. - Your existing deal includes high early repayment charges.
Porting helps you avoid costly exit fees that would apply if you ended your mortgage early. - Your financial circumstances haven’t changed significantly.
Since lenders reassess affordability, stable income, and credit history improve your chances of approval when porting your mortgage.
However, porting is not guaranteed and depends on lender approval. They will reassess:
- Your income, credit score, and the value of the new property.
A full affordability check is usually required to ensure you still qualify under the current criteria.
If your new property costs more:
- You may need a top-up loan.
Any additional borrowing will likely come with a different interest rate and repayment terms.
Key Considerations When Porting a Mortgage
- Not all mortgages are portable.
Some deals, especially older or discounted rates, don’t include the option to port. Check your agreement or speak with your lender. - You must complete the sale and purchase within a specific timeframe.
Lenders usually require both transactions to happen close together—often within 30 to 90 days—to honor the ported terms. - You might still pay arrangement or valuation fees.
While porting can save on exit charges, standard fees like application, legal, or valuation costs may still apply.
Can I Port My Mortgage to a More Expensive Property?
Yes, you can port your mortgage to a more expensive home, but there are a few important factors to consider:
- Your lender may approve the ported amount, but additional borrowing will be at a new rate.
If the new property costs more than your current mortgage covers, you’ll need to borrow the difference, which will usually be issued as a separate loan with a potentially higher interest rate. - You will likely undergo a full affordability assessment.
Even though you’re an existing customer, your lender will reassess your income, debts, and credit score to ensure you can afford the larger total loan amount. - The process may involve additional arrangement or legal fees.
Moving to a higher-value property often includes extra costs such as valuation fees, legal charges, and possibly early repayment fees on part of the existing loan.
Understanding these details can help you plan your move more efficiently and ensure your mortgage supports your long-term goals.
Example:
Suppose your current mortgage is £200,000 at a 2.5% fixed rate. You want to move to a property worth £300,000. Your lender might allow you to port the existing mortgage and top it up with a new £100,000 loan, possibly at a higher rate.
So, while porting a mortgage to a more expensive property is possible, make sure the blended rate (combined interest on both parts) is still competitive overall.
Tips for a Smooth Mortgage Transition
Moving house while managing a mortgage requires forward planning and smart financial decisions. Whether you’re porting your mortgage or applying for a new one, the following tips will help ensure a smooth and stress-free transition. Here’s how to stay on top of your mortgage when moving house:
Review Your Current Mortgage Terms and Conditions
- Check for any early repayment charges (ERCs) or exit fees.
- Understand whether your mortgage is portable to a new property.
- Note the expiration date of your current deal to avoid higher standard rates.
Speak to Your Lender or a Broker Early
- Mortgage advisors can explain how a mortgage works when moving house in your specific case.
- Brokers compare lenders and rates to find the most cost-effective option.
- Early discussions give you time to fix issues with affordability or eligibility.
Get a Mortgage in Principle Before Making an Offer
- A mortgage in principle strengthens your buying position with sellers.
- It gives you a clear idea of how much you can borrow when moving house.
- Helps identify any borrowing limitations before you’re committed.
Compare Deals — Don’t Assume Porting is the Best Value
- Porting may seem convenient, but it might not offer the most competitive rate.
- Remortgaging could save money if interest rates have dropped.
- Consider all costs, including arrangement, valuation, and legal fees.
Budget for All Costs, Including Legal, Valuation, and Moving Expenses
- Include stamp duty, surveyor fees, and solicitor costs in your moving budget.
- Account for mortgage fees like exit charges or product fees for new deals.
- Always leave a financial buffer for unexpected costs or delays.
Avoid New Debts During the Application Process
- Lenders check your credit file before approving porting or remortgaging.
- New credit cards, loans, or buy-now-pay-later agreements can reduce affordability.
- Stable finances improve your chances of approval and better rates.
Keep Your Credit Score Strong
- Pay bills on time and avoid missed payments.
- Keep your credit utilization low (below 30% of available credit).
- Register on the electoral roll at your current address for credit accuracy.
Final Words
So, How does mortgage work when moving house? The answer depends on several key factors, including your financial situation, the price of your new home, and your current mortgage lender’s policies. You’ll generally have a few main options: porting your existing mortgage, remortgaging with a new deal, or paying off your current mortgage if you’re downsizing.
Each option has its pros and cons, and the best choice will depend on your unique circumstances. Porting can help you retain your current rate, while remortgaging might offer better terms or flexibility.
To avoid costly mistakes or delays, always consult with a qualified mortgage advisor. They can help you evaluate your options and guide you through the process efficiently. With the right advice and a clear plan, managing your mortgage when moving house can be a smooth and financially smart experience.