Copy article

Are mortgage clients/borrowers showing more of an interest in mortgage porting?

Journalist: Shekina Tuahene, Mortgage Solutions

ended 16. November 2022

I am looking to speak with brokers who are noticing a rise in clients enquiring about mortgage porting and their reasons for this.

Due to rising house prices, I'm assuming that some people bought properties with the intention to sell and make a gain quite quickly. Also with rates going up, I'm guessing there will be people who bought just to get a foot on the housing ladder while it was still affordable to them, but they know that the property they have bought won't be for the long-term.

Is this something you have noticed?

This will be for Mortgage Solutions [www.mortgagesolutions.co.uk]

7 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Justin Moy
Managing Director at EHF Mortgages
Porting is perhaps the unexpected gift of rising interest rates. It allows those on longer-term deals arranged over the past few years to still benefit from those low rates, assuming their lender is happy to still support them. Just the additional borrowing is on a current market rate, so once you 'blend' both deals together, it's still an attractive opportunity. This makes it a very attractive situation for those who took a long-term fixed deal and can still benefit from it, making a home move less expensive. And for some, that opportunity wasn't one caused by their planning, but by how the market has moved recently. We have definitely seen an increase in those wanting to learn more about their porting facility, and what the cost of moving would be. But it's not a given right to port, as the lender will still need to check affordability and stress test as applicable.
Copy

Editor
Mike Staton
Director at Staton Mortgages
We have started to see a clear rise in the popularity of porting mortgages. I have already done two this month compared to the 4 I have done over the past 12 months. My other advisers are also experiencing the same. With the economic seas so stormy, more and more people are looking for a safe port.
Copy

Editor
Craig Fish
Director at Lodestone Mortgages
I've just done two of these for the same client. Our clients are selling their current main residence and downsizing by moving into a property that they currently let, primarily because of the downturn in the housing market. Being that their current rate is fixed until the end of 2025 at 1.34%, they have requested to take this mortgage with them. Because they are moving into a previously let property, and they have equity from the sale of their current residence, they are going to invest those funds into a new buy-to-let property and transfer their other (BTL) mortgage across. That rate is 2.05% until early next year. Needless to say, choosing new products was completely off the cards.
Copy

Premium
Edward Checkley
Managing Director at Advias
Buying a property should always be a long-term investment, especially when considering the significant cost of acquisition, namely taxes, surveying, legal and mortgage costs. Sometimes life gets in the way and moving home will be a requirement for a variety of reasons such as a growing family, relocation for work or family breakdown. With mortgage rates having been so low for so many years, porting existing mortgages can be a highly attractive option to maintain the existing terms. The interest in porting will be driven by the requirement to move over any other, however many borowers may not be aware of the flexibility offered by their existing lenders. This could be, for example, exceed the original LTV limits whilst maintaining the rate or reallocating the borrowing to interest only. If these features were common knowledge then many may give serious thought to porting rather than feeling trapped.
Copy

Austyn Johnson
Founder at Mortgages For Actors
Porting has always been that underexplained part of a mortgage deal. What clients don't usually understand is that this still entails a full mortgage application and a credit & affordability check. What you are saving is just the rate. What we have noticed is that the younger generation who bought and stretched their income to the max, when it's time to port, they may have now had a child or one of them cut hours. This means that the affordability will suffer and with today's stress tests, it can be hard to make it fit. If all the research is carried out first and it still fits, then yes, porting can work, but in my part of the industry it's rare. Most applications are for full purchase or remortgage/PT.
Copy

Matthew Jackson
Director at Mint FS
In truth, the porting of an existing long term fixed rate or even lifetime tracker has always been a good option for borrowers. Any good broker will always factor this into their considerations for advice. However in the past where clients have been tempted to break a fixed rate and pay an early repayment charge to secure a lower rate of interest or a larger potential loan, this is no longer an option. As a brokerage, we have noticed more clients leading discussions in this direction, in the knowledge that the fixed rate they entered into in the last year or two will be significantly below that available now. These tend to be clients that "need to move" as opposed to aspirational homemovers, so relocations for work or first-time buyers moving in with partners or starting a family and needing more room. A good broker will look at the deal being ported and consider the client's future plans and adapt their advice to suit for any "top up" funds needed to purchase the new property, and of course consider whether the loan will still be affordable when the fixed rate period on the loan being ported expires.
Copy

Dan Osman
Head of Later Life Lending (Age 55+) at UK Moneyman
In the later life lending space, downsizing is always considered, front and centre, as an alternative to a lifetime mortgage. Clients often have valid reasons not to consider downsizing at the time however many are now more open to the thought that their current property is not the one they are likely to live in until they die or go into care. For those clients, the significance of features such as downsizing protection can significantly outweigh small rate savings and can help boost clients' confidence in the decisions they are making. With one lender at least offering downsizing early repayment charge protection from day one, it is clear that this is something that lenders are also taking seriously.