How Does Moving House Affect Your Mortgage?

Moving house usually means taking your mortgage into account alongside everything else involved in buying and selling property. If you already have a mortgage, you may be wondering what happens to it when you sell your current home and buy another one.

The answer depends on your existing mortgage deal, the property you are buying and how much you need to borrow. 

In some cases, you may be able to take your current mortgage with you. In others, moving house could mean repaying your existing mortgage and arranging a new one.

Can you take your existing mortgage with you?

Some mortgages are portable, meaning your existing mortgage can potentially be transferred from your current property to your new home.

Porting a mortgage can be useful if your current interest rate is attractive or you are still within your existing fixed-rate period. However, it is not necessarily automatic. You will usually still need to meet your lender’s affordability and lending criteria for the new property.

If you are moving to a more expensive property, you may also need to borrow additional money. The extra borrowing could potentially be arranged separately and may have a different interest rate or mortgage term.

What happens if your mortgage is not portable?

If your mortgage cannot be ported, you may need to repay your existing mortgage when you sell your home and arrange a new mortgage for your next property.

This could involve an Early Repayment Charge (ERC) if you are leaving your current deal before it ends. The amount and conditions will depend on your mortgage.

This is why it is important to check your current mortgage terms before committing to your move.

What if you need to borrow more?

Moving house often means reassessing how much you need to borrow. You might have built up equity in your current property, which could contribute towards the deposit for your next home.

However, if your next property is more expensive, you may need a larger mortgage. Lenders will assess your affordability based on factors such as your income, expenditure, deposit and existing financial commitments.

Your circumstances may also have changed since you took out your current mortgage, so the mortgage that suited you previously may not necessarily be the best option for your next property.

When should you review your mortgage?

Ideally, consider your mortgage options before you start making offers on your next home. Understanding your likely borrowing capacity and what will happen to your existing mortgage can help you plan your move with greater confidence.

A mortgage broker can review your current deal, explain whether porting may be an option and compare potential alternatives based on your circumstances.

Get advice before moving home

Moving house does not necessarily mean simply transferring your existing mortgage to a new property. You may be able to port your mortgage, arrange additional borrowing or switch to a completely new deal.

Getting professional mortgage advice from an experienced broker can help you understand the costs and options before you commit to your next move.