Mortgage blog: Moving house? Just take your mortgage with you – or can you?

Date:

Monday 15th October 2012

When you move, it's not simply a case of moving your mortgage too

If you're moving house, you've probably assumed that you can take your mortgage with you onto your new property. You may have a fixed or discounted rate with early repayment charges that mean you have to ‘port' your deal onto your new home. Or you may be reducing your mortgage borrowing needs and so presumed getting your next mortgage would be easy.

However, if you think that taking your mortgage onto your new home is as easy as signing a form - think again. Changes in lending criteria mean that many people are being refused a new mortgage by their existing lender, as we see here.

Porting your existing deal

If you took out a mortgage deal with early repayment charges you may have been told that your deal was ‘portable'. This means that you are allowed transfer the deal onto a new property if you move home. However, what many people don't realise is that it is the interest rate that is portable, not the mortgage itself.

When you move home and take out a mortgage on a new property, you will take out a brand new mortgage with a brand new account number. Your existing mortgage is normally repaid in full. Although your fixed- or discounted-rate deal may be applied to your new mortgage, it's still a brand new loan.

Your lender will underwrite your new mortgage from scratch. You'll have to fill in a new application form, provide proof of income and undergo a credit score. Now, if none of your circumstances have changed since you bought your home, getting a mortgage on a new property shouldn't be an issue.

However, if your income is lower or your credit rating has deteriorated, you may find that your lender will refuse your application. You may also have to take your new mortgage on a different basis - for example, repayment rather than interest only - and your lender may also insist on a different term.

Keith Osborne from whathouse.co.uk, says: "Many people don't realise that they are taking out a brand new mortgage when they move home. They assume they can take out the same loan on the same rate on a new property. However, as lenders have tightened criteria over recent years, many borrowers are finding that they aren't being approved for a new mortgage - even if it's for the same amount and on the same deal as before."

Mortgage expert Ray Boulger said: "Despite most mortgages being portable in theory, lenders require borrowers to meet their criteria at the time of moving, even if they don't want to increase their mortgage or want to reduce it. In the current market, this results in many bear traps."

Click here to find out more about how whathouse.co.uk can help you find the right mortgage.

 

New Homes by Banner Homes

Part-Exchange Available
Aubin Wood
Aubin Wood, Oak Tree Drive, Emsworth, Hampshire, PO10 7UJ
NOW AVAILABLE from £150,000
Aubin Wood is a wonderful collection of 48 fabulous new homes nestled on the fringes of beautiful Emsworth. Aubin Wood includes a high quality, well...
Bentley Priory
Bentley Priory, The Common, Stanmore, Middlesex, HA7 3HH
NOW AVAILABLE from £5,250,000
Welcome to Bentley Priory, an exceptional collection of seven individually designed detached family homes in an exclusive gated development located...
Burntwood Drive
Burntwood Drive, Oxted, Surrey, RH8 9HD
NOW AVAILABLE from £1,900,000
Burntwood Drive consists of three unique five/six bedroom detached family homes, offering between 4200 - 5300 sqft* of...
Part-Exchange Available
Greenways
Greenways, Clifton Road, Chesham Bois, Buckinghamshire, HP6 5PE
NOW AVAILABLE from £1,695,000
These stylish homes at Greenways bring contemporary living, intelligent design and quality to the heart of Chesham Bois. These superb new homes...
Part-Exchange Available
Hartsbourne Court
Hartsbourne Court, Hartsbourne Road, Bushey Heath, Hertfordshire, WD23 1JF
NOW AVAILABLE from £895,000
Introducing this exclusive new development consisting of twelve luxurious apartments in Bushey Heath, Hertfordshire. These outstanding new...
Imperial Grove
Imperial Grove, Camlet Way, Hadley Wood, Greater London, EN4 0NX
NOW AVAILABLE from £1,525,000
The Grand Garden Duplex and The Penthouse, our newly interior designed dressed show homes are now open. A stylish new development consisting of a...
Jayswood
Jayswood, Nyetimber Lane, West Chiltington, West Sussex, RH20 2ND
NOW AVAILABLE from £695,000
A delightful collection of homes comprising of four semi-detached three bedroom homes and three detached four bedroom homes. Just one wonderful home...
Petersgate
Petersgate, Warren Road, Kingston, Greater London, KT2 7HY
NOW AVAILABLE from £2,950,000
Four detached five/six bedroom family homes all arranged over three floors. Our stunning homes form part of the exclusive Coombe Estate in...
Part-Exchange Available
Promenade De Verdun
Promenade De Verdun, Webb Estate, Purley, CR8 3LN
NOW AVAILABLE from £4,000,000
Developed to meet the aesthetics of the residential conservation area of the Webb Estate, it is easy to see why many are drawn to the superb...
The Meadows
The Meadows, Banbury Lane, King's Sutton, Oxfordshire, OX17 3RX
NOW AVAILABLE from £199,950
A wonderful collection of new homes consisting of apartments, semi detached and detached homes ideal for families of all sizes. Only apartments and...
Part-Exchange Available
The Regency Apartments
The Regency Apartments, Manor Road, Chigwell, Essex, IG7 5PW
NOW AVAILABLE from £750,000
Designed, built and finished to an exceptional standard and positioned for those who appreciate the very best, Banner Homes are delighted to...
Viburnum Gate
Viburnum Gate, Loom Lane, Radlett, Hertfordshire, WD7 8NY
NOW AVAILABLE from £2,275,000
Introducing Viburnum Gate a development consisting of four impressive detached five and six bedroom family homes located in Radlett, one of the most...