Moving home is a big step that often comes with lots of questions, not least about your mortgage. If you’re wondering, “What are my mortgage options when I move home?”, you’re not alone. Whether you’re selling your current property and buying a new one, downsizing, or upsizing, understanding your mortgage options can help you plan confidently and avoid surprises.
In this guide, we’ll break down the main mortgage choices available to you when moving home, explain key terms, and offer tips to help you make the best financial decisions.
Why Understanding Your Mortgage Options Matters When Moving Home
Moving home usually means changing your mortgage situation. The mortgage you currently have might not fit your new property, financial circumstances, or plans. By exploring your mortgage options early, you can:
- Avoid costly early repayment penalties
- Find better interest rates or deals
- Ensure you can afford your new home comfortably
- Reduce stress by knowing what to expect
Common Mortgage Options When You Move Home
1. Porting Your Mortgage
Porting a mortgage means transferring your existing mortgage deal from your current home to your new property. This option lets you keep your current interest rate, avoiding early repayment charges (ERCs) that often come with fixed-rate or discount mortgages.
How Porting Works:
- You apply to your lender to transfer your mortgage deal to your new property.
- Your lender assesses your finances and the new property’s value.
- If approved, you keep your current mortgage deal, but your lender will check you can afford repayments on the new home.
Things to Consider:
- Porting may not be possible if your new home costs more and you need to borrow extra money. In this case, you may need a second mortgage or a new deal for the additional amount.
- If your new home costs less and you pay off some of your mortgage, you might face ERCs on the amount you repay early.
- Porting can be straightforward but may still require a full application process and affordability checks.
2. Repaying Your Current Mortgage and Taking Out a New One
If porting isn’t an option or doesn’t suit your plans, you can repay your existing mortgage in full when you sell your home and apply for a new mortgage to buy your next property.
Pros:
- You can shop around for better mortgage deals, which might offer lower interest rates or more flexible terms.
- It allows you to reset your mortgage term and potentially reduce monthly payments.
- No need to worry about ERCs if your current deal has ended or you’re willing to pay the penalty.
Cons:
- Early repayment charges may apply if you leave your current mortgage before the fixed term ends.
- You must go through the mortgage application process again, which includes credit checks and affordability assessments.
- There may be additional fees, like valuation and arrangement fees.
3. Using a Bridging Loan or Bridging Mortgage
If you want to buy your new home before selling your current one, a bridging loan or bridging mortgage can provide short-term finance to bridge the gap between transactions.
How Bridging Loans Work:
- They provide funds to help you purchase a new property quickly.
- The loan is usually secured against your existing property.
- Once your current home sells, you repay the bridging loan.
Pros:
- Allows you to move quickly and avoid missing out on your ideal property.
- Gives flexibility in timing the sale and purchase.
Cons:
- Bridging loans have higher interest rates than traditional mortgages.
- They’re typically short-term, often requiring repayment within 6 to 12 months
- Fees and costs can be higher.
4. Switching to a New Mortgage Product
Sometimes, instead of porting or repaying your mortgage, you might want to switch to a new mortgage product with your current lender. This might be done when your current deal is coming to an end.
Benefits:
- Potential to secure a better interest rate or deal without changing lenders.
- May be simpler and quicker than applying for a new mortgage.
- Avoid early repayment charges if you switch at the end of your deal.
5. Applying for a New Mortgage with a Different Lender
If your current mortgage deal is ending or doesn’t suit your new property, applying for a mortgage with a different lender may be your best bet.
Why Consider This?
- You could access more competitive rates or better terms.
- Some lenders specialise in certain property types or financial situations.
- You may want a mortgage product that better fits your future plans.
How Do Mortgage Lenders Assess Your Application When Moving Home?
Whether you port your mortgage or apply for a new one, lenders will consider:
- Your income and employment status
- Credit history and credit score
- Existing debts and financial commitments
- Affordability checks based on your income and outgoings
- The value and condition of the new property
Be prepared to provide payslips, bank statements, proof of ID, and details of your current mortgage.
Can You Move Home During a Fixed-Rate Mortgage?
If you’re on a fixed-rate mortgage, moving home doesn’t mean you automatically lose your deal but there may be ERCs to pay if you don’t port your mortgage.
Porting your fixed-rate mortgage lets you keep your deal and avoid penalties.
If porting isn’t an option, paying off your fixed-rate mortgage early may trigger ERCs.
Some lenders offer a “port and top-up” option, where you transfer your current mortgage and borrow extra for the new property.
Always check your mortgage agreement or talk to your lender about your options.
How to Prepare for Moving Home with a Mortgage
To make moving home as smooth as possible, follow these tips:
1. Start Planning Early
Begin looking at your mortgage options well before you plan to move. This gives you time to understand porting options, arrange valuations, and compare new deals.
2. Get a Mortgage Agreement in Principle (AIP)
Before making an offer on a new home, get an AIP from your lender. This shows sellers you’re a serious buyer and gives you an idea of how much you can borrow.
3. Understand Your Finances
Calculate your budget including all moving costs — legal fees, stamp duty, removal costs, and any ERCs.
4. Seek Professional Advice
Speak to a mortgage adviser who can review your current mortgage and help you find the best option for your move.
What Happens to Your Mortgage When You Sell Your Home?
When you sell your home, the mortgage is typically repaid from the sale proceeds. If your home sells for less than your mortgage balance, you’ll need to cover the shortfall or negotiate with your lender.
If you’ve overpaid, you may get some cash back after settling the mortgage and any fees.
Ready to Explore Your Mortgage Options When Moving Home?
Moving home can feel overwhelming, especially when mortgages come into the picture. But knowing your options from porting your mortgage, repaying and remortgaging, to applying for bridging loans or new deals can help you make smart, informed choices.
If you’re planning a move and want expert advice on your mortgage options, the team at UK Mortgage Centre is here to help. Whether you’re unsure about porting, want to avoid penalties, or want help finding the best mortgage deal for your new home, we’re just a call or click away.
Call us on 01925 573328, book your own appointment, or email hello@ukmc.co.uk today. Our friendly mortgage experts will guide you every step of the way, making your move smoother and stress-free.
Disclaimer – UK Mortgage Centre is a trading style of Refresh Mortgage Network Limited. Refresh Mortgage Network Limited is authorised and regulated by the Financial Conduct Authority. FRN – 826982. Registered in England & Wales: 11614569. As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages. The Financial Conduct Authority does not regulate will writing and taxation and trust advice.
