Moving home but don’t want to relinquish your low mortgage rate? David Jackson explains how porting could offer the solution…
The Question
My husband and I want to move home and have started house hunting. We live in a two-bed terrace but need more space for our growing family so hope to buy a three or four-bed semi.
We are three years into a five-year fixed rate mortgage on which we are paying 2.09%. With two years left to run we are concerned about paying an exit fee, which we understand is around 2%.
On top of this, with mortgage rates so much higher, we are concerned the more expensive repayments as well as the exit charge might hinder our application. Should we hold off on our house move until our mortgage expires or is there another solution?
David’s Answer
One potential solution is to consider porting your mortgage. Many lenders allow you to transfer your existing mortgage to a new property, subject to meeting their criteria. This would let you keep your current rate and avoid the exit fee.
However, you would need to go through the lender’s assessment to determine how much they would be willing to lend for your new property.
If you want to explore other lenders with more suitable options, you would likely face an early redemption penalty. In this case, it’s essential to weigh the costs versus the benefits.
While delaying your move to avoid the exit fee might seem sensible, it could limit your lifestyle. If your current lender allows it and you can afford the move, porting could be a good option.
If you need to increase the loan size for a larger property, the additional borrowing would be at today’s higher rates, which could mean you have multiple products with different terms.
It’s advisable to seek advice from an independent mortgage broker to ensure you make the best decision based on your overall financial situation.
Meet our expert…
David Jackson established Prestige Private Finance in 2014 after nearly two decades in the mortgage industry. With experience in London’s high-net-worth areas, David and his team offer empathetic and expert advice for your financial journey.
If you have a question for David please email kate.saines@emap.com or leave a message in the comments below.
