When moving house, understanding how your mortgage deal works is essential to ensure a smooth transition. If you’re tied to a current mortgage, you may wonder whether it’s possible to break it early without facing heavy penalties. So, How does mortgage work when moving house In some cases, you might be able to transfer your mortgage deal to the new property, but other times, you may need to pay off the existing loan and secure a new one. Additionally, refinancing could help you secure a lower interest rate, making the process more financially favourable. Understanding these factors can help you make informed decisions when relocating.
How does mortgage work when moving house In Dubai?
When you move home in Dubai, your existing mortgage doesn’t automatically transfer. You can increase your mortgage if you’re moving to a more expensive property or apply for different mortgages depending on your financial situation and lender policies. Most homeowners either settle the current loan when selling the property, refinance with better terms, or request mortgage porting if their bank allows it. You’ll also need to factor in valuation fees, early settlement charges, and lender approval for the new home. Understanding these steps helps you manage payments smoothly, avoid unexpected costs, and choose the most cost-effective mortgage option when relocating in Dubai.
What will happen to my mortgage when I move home?
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. |
What to check and know before applying
- 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 You Transfer Your Mortgage to a New Home?
Yes, many lenders in Dubai allow you to transfer your mortgage to a new property, but the process depends on your current mortgage deal and financial profile. When moving, your bank will reassess your affordability to ensure you can manage the repayments. If the new home is more expensive, you may need to borrow more money to cover the difference. In some cases, transferring isn’t possible, and you’ll end up taking out a new one instead. Reviewing your options carefully helps you avoid extra fees and choose the most cost-efficient solution for your new home.
Early Loan Settlement Fees You Should Know
When moving house in Dubai, it’s important to understand the charges involved in closing your existing loan. These fees apply whether you settle the current one fully or consider porting a mortgage to a new property.
Early Repayment Charge Overview
An early repayment charge is applied when you settle your mortgage before the agreed term ends. Banks impose this fee to cover interest losses when you close the current one early. In Dubai, this charge is usually capped, so knowing your lender’s policy helps you plan your move effectively.
Bank Administrative and Processing Fees
Closing your mortgage often includes administrative costs such as processing fees, release charges, and valuation expenses. These fees apply even if you’re porting a mortgage to another property. Understanding these charges in advance helps you estimate your final settlement cost and avoid financial surprises during your home move.
Costs When Switching or Refinancing
If you switch lenders or refinance instead of transferring the current one, you may face additional costs like new valuation fees, transfer charges, and mortgage registration fees. Checking these expenses beforehand ensures you compare options accurately and choose the most cost-efficient approach when moving to a new home.
Refinancing Your Mortgage During a Move
Refinancing your mortgage during a home move in Dubai can be a smart financial step, especially if you want better interest rates or flexible terms. The good news is that many lenders offer competitive options when switching your mortgage and taking a new deal. During refinancing, the bank reassesses your income, credit score, and the new property’s value to ensure you qualify. While Dubai doesn’t charge stamp duty, you should still plan for valuation fees, transfer charges, and possible early settlement costs. Refinancing helps reduce long-term payments and gives you more control over your mortgage when relocating.
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.
FAQs
Should I port or remortgage?
Porting lets you keep your existing rate, but remortgaging may offer better deals. Compare fees, affordability checks, and long-term costs to decide which option benefits your move.
Can I get a new mortgage with a different provider when I move home?
Yes, you can switch lenders when moving. The new bank will reassess your income, credit score, and property value to confirm eligibility and offer competitive rates.
Do I need to close my mortgage when selling my home?
Yes, most lenders require you to settle the mortgage before transferring ownership. The sale proceeds usually pay off the remaining balance and clear the loan.
Will I pay a penalty for moving during a fixed mortgage term?
Yes, moving during a fixed term may trigger early repayment charges. These penalties compensate the lender for lost interest when the loan is settled early.
Should I refinance my mortgage when moving?
Refinancing is helpful if you can secure lower rates or better terms. It reduces long-term costs, improves flexibility, and aligns your loan with your new home’s value.