What Happens To My Mortgage When Moving Home?

Moving home is an incredibly exciting time. You’ll have lots to plan, from paint colours to home improvements, as well as logistical things to consider like school moves and changing commutes. Before all of that, though, there’s one essential part of the process that requires very careful attention, and that’s your mortgage when moving home.

Selling your current property and arranging a mortgage for your next home works quite differently from buying your first, and these complications might naturally taint some of the excitement with overwhelm. Understanding your options early on in the process can make the entire process much smoother, which is why we have put together this guide covering what happens to your mortgage when moving home.

How Mortgages Work When Moving Home

Moving home isn’t something most of us do particularly frequently; in fact, it might be years after buying your first home and applying for your first mortgage that you even contemplate upping sticks again. For those in this boat, one of the very first questions they ask us is a clear one: “How do mortgages work when you move house?” 

Ultimately, the answer depends on your current deal and your lender, but you’ll have three main options: porting your current mortgage, taking out additional borrowing with your current lender, or remortgaging entirely.

1. Porting Your Mortgage

If you’re happy with your current mortgage, perhaps because you’re currently on a favourable interest rate, you can often transfer (‘port’) your existing mortgage to your new property. For this to happen, your lender will reassess affordability alongside the new property to make sure that everything still meets their criteria. Providing they agree to do so, porting your mortgage when moving home might save you a considerable amount on fees and charges.

2. Taking Out Additional Borrowing

If you’re planning to upsize or move to a more expensive property, it’s likely that you’ll need to borrow more than your current mortgage balance. In this case, you can ask your current lender if you can borrow more on your existing mortgage, or port your mortgage and take out an additional loan on top, typically at a different rate.

3. Remortgaging With A New Lender

If you cannot or do not want to remain with your current lender, the third option when considering your mortgage when moving home is to repay your existing mortgage entirely and take out a new mortgage with a different lender. This might give you access to more competitive rates or a more suitable product for the new property.

The types of mortgage products suitable in these circumstances are called home mover mortgages: products designed specifically for people selling one property and buying another. They may offer competitive rates for borrowers in this situation, with features and structures that align with the timelines of moving. Just be mindful that you may incur early repayment charges should you break your current mortgage deal in the middle of a fixed term, which may outweigh the savings of remortgaging with a new lender.

Tips For A Smooth Move

Out of these different options, there’s no single correct way to deal with your mortgage when moving home. The most suitable solution will depend on your current deal and how much you need to borrow, and the options presented to you by your lender. That’s why we’d always recommend speaking to us as early on in the home move as possible, so that you can get a full understanding of things before any nasty surprises.

At Mewstone Mortgage Advice, our mortgage advisers in Plymouth have vast experience helping home movers navigate mortgage complexities. We’ll take the time to understand your current position and help you find the right mortgage product for your move. 

If you’re navigating what to do about your mortgage when moving home, get in touch with us today. You can call us directly on 01752 938933 or book a quick call at a time that suits you to find out more with no obligation.