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Mortgage porting

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 11. January 2024

Interested to talk to brokers about mortgage porting. 

  • Have you seen an increase in mortgage porting enquiries? 
  • When would you recommend this to a client? 
  • What are the advantages and disadvantages? 
  • Can the process be improved/what would you like to see from lenders on this? 

 

11 responses from the Newspage community

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Justin Moy
Managing Director at EHF Mortgages
There has been a steady increase in Porting cases throught the last 18 months. Clients are taking advantage of those existing cheaper deals and taking advantage of some lower property prices. Many have been moving some distance, out of city centre locations to more rural places, an interesting byproduct of the current financial situation. One of the common mistakes though is that borrowers believe they have the automatic right to take their mortgage with them,they don't realist you have to re-apply for the new mortgage first, so any change in income or employment, or some missed credit payments might mean they don't qualify to port their mortgage deal.
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Mike Staton
Director at Staton Mortgages
For many people, porting has been a sensible option to keep the lower rate they took out before the economic crisis we have found ourselves in. However, many clients are unaware that the lenders will still put them through vigorous underwriting processes that feel like the lender does not want to allow them to keep the rate they have, I have seen many clients apply for porting only to be declined on affordability, due to increased debt, stress testing and lack of willingness by the lender to lend by failing to meet credit score which the lender can change at their whim. Porting is great, but do not be fooled into thinking it is your god-given right, your lender can still decline you.
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Michelle Lawson
Director at Lawson Financial
Porting is a key offering from lenders and for those wanting to move and keep their low rates. What consumers need to understand though is porting is not a given as it is subject to a new application and the proviso that the current terms and conditions still apply. Those that cannot do this will have no option but to sit tight or pay penalties to leave and change lenders. Some lenders do this well, others less so with hidden calculators and often less advantageous terms for existing customers.
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
We're certainly seeing more porting cases we've recommended recently, which is unsurprisingly down to clients having competitive rates locked in already, but wanting to move home without losing out.

In many cases, we've been able to get the required top-up borrowing from the same lender but it's still a case of clients meeting the lender's current criteria in order to make it work. Lenders will often allow the term on the part being ported to be adjusted to match the top-up borrowing too.

It's important for clients to be aware of the fact they'll end up with multiple parts to their mortgage with different end dates which could mean things get a bit messy when it comes to remortgaging in the future.

One of the main areas we've seen porting cases increase is where couples get divorced and one is taking the mortgage to their new property. Some solicitors are actually factoring this as a benefit for one party when working out any financial settlement as part of the divorce.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
With many clients clinging onto the ultra low fixed rates for dear life, many looking to move within that tie-in period can save considerably by porting that rate across with only any additional borrowing on today’s higher rates. This also has the benefit of avoiding early repayment charges. Sometimes this is not possible if their existing lender doesn’t allow porting or on today’s affordability assessment can not lend enough for the additional amount required.
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James Bull
Mortgage Broker at JB Mortgages
Porting a mortgage is extremely beneficial for many of my clients. Many people who took out long fixed rates in the last couple of years have sub 2% deals which they can port, which is much lower than new mortgages in the marketplace. Porting also saves paying an early repayment charge which is usually thousands of pounds. Most lenders have a straightforward process for this and pay full proc fees. Although I came across one lender recently who was paying zero proc fee on like-for-like borrowing which is disappointing to see.
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Peter Stokes
Director of Mortgages at Davidson Deem
Without a doubt, porting applications are on the rise. Despite some of the disadvantages of porting remaining (rates not in sync etc), most rates being ported are much lower than today's fixed rates, so why wouldn't you want to hold on to them?
However, porting remains a complex issue, and it is imperative customers get advice on what to do. Lenders all in all, are pretty good at porting, although some smaller lenders will only deal directly with clients and cut us out. One large lender (HSBC) will also allow brokers to act in simultaneous ports, but if it is non-simultaneous, the clients must go direct. Come on HSBC - this needs addressing!
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Ian Hewett
I have completed this myself directly with a lender. I can honestly say, after 3 individual telephone meetings, which consisted of the following. 1 - A pre-meeting meeting consisting of 3 hours of confirming all the details I had already entered multiple times. 2 - A second pre-meeting meeting, again me clarifying all the data we had already entered and confirmed on the previous call, again lasting 3 hours. 3 - The final meeting, again, reconfirming all the data that I had entered and confirmed in the previous 2 meetings and you guessed it, lasted 3 hours. To say I found this process more uncomfortable than a rectal exam with someone who has not cut their nails for a few years would be an understatement. And guess what, they still messed it up!!
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Porting a mortgage is a vital tool for many brokers and clients, as the chance of someone wanting to move home at exactly the point their mortgage deal ends is rare, meaning most are tied into a deal with ERCs that need to be factored in. Given that currently, a lot of these deals will also be on interest rates that currently can't be beaten, it makes sense to port wherever possible, with a simultaneous further advance for any additional funds needed. The issue with that is the process and overall experience will vary greatly from lender to lender. Many lenders are very slick now when it comes to new business, but porting and further advances are often clunky, labour-intensive and in the worst cases only allow additional borrowing on their SVR. It's an area where many lenders can really improve their proposition, which in turn will help them retain more business and so help their net lending position.
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Gary Bush
Financial Adviser at MortgageShop.com
The porting of mortgage cases is a very unused feature of most mortgages, why is the question - the facility is great if used properly. I think the biggest use of this is for separating/divorcing mortgage applicants who need lenders to allow both of them to port all or a share of their current mortgage deal to their new home and potentially with a new partner on each application. I think the biggest problem with the porting of mortgages is that lenders all have different and complicated procedures and processes to follow, often with paper-based applications which should really have been left back in the 90's. Some lenders offer great facilities to port and to be honest other lenders need to take a long look at the good examples and improve their own arrangements. It's particularly relevant in the current market for couples who signed up pre-mini budget chaos for a decent and low 5 or 10-year fixed rate with their lender and now need to take this deal onto their new properties.
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Richard Jennings CeMAP
Founder & Managing Director at Richard Jennings Mortgage Services
We have seen a growth of circa 47%

Porting a mortgage can be a good option if you have a competitive interest rate and want to avoid paying early repayment charges . As rates have increased significantly this has resulted in the vast majority of our recommendations including the option to port.

Advantages
You will not be required to pay any mortgage exit fees/early repayment charges.
If your initial mortgage is at a lower interest rate, you will carry on paying that low rate at your new property .

Disadvantages
The element you need a top up for may not be as competitive as you could get elsewhere.
You will end up with two different mortgage products, rates and end dates to manage
You will be bound by your existing lenders criteria which may not be as flexible.

Offering exclusive, better, rates for the element required to top up. Also a streamlined application process for existing clients porting.