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Remortgaging When Moving Home

Posted by Jessica on Wednesday 18 October 2017

What happens to your mortgage when you move home? That’s a question that many homeowners are asking today. While ‘porting’ was once very popular, we’re starting to see more and more homeowners opt for remortgaging. Why?

Porting

Prior to the financial crisis, many homeowners chose to port their mortgage. Porting a mortgage simply means that an existing mortgage is transferred to the new property - it moves with you. Minor amendments to repayments may be made based upon any changes in value between the two properties. However, in the last few years, lenders have been making it more difficult for homeowners to port their mortgage, or even impossible, especially for those on very low interest rates, and for older borrowers, who are at a higher risk of having a porting application rejected.

Homeowners planning on buying and selling a property are now being urged to consider different mortgage options, including remortgaging. Moving home is one of the best times to start researching different mortgage products to see if you could be paying a lower interest rate with a different lender.

Remortgaging with a New Lender

Many homeowners look at remortgaging when moving house, especially those who are currently on a tracker mortgage. While tracker mortgages can sometimes offer very attractive rates, these rates can fluctuate wildly, which can make it more difficult to accurately budget for your forthcoming move.

Although there are many great ways to save money when moving, such as selling your home with Settled, which as you may know could save you £4,000, moving can still be a rather costly process. It’s estimated that the amount it costs to move house in the UK is around £12,000 on average, factoring in everything from removals to stamp duty. Remortgaging from a tracker mortgage to a fixed rate mortgage with a new lender enables you to plan for the future, knowing exactly how much you’ll be paying each month on your property.

Even if you’re not planning on switching from a tracker mortgage to a fixed rate mortgage, remortgaging could still be a sensible option for you. Mortgage rates are becoming increasingly competitive, and it may be possible to find a better deal with a new provider, helping to save you money in the long term.

When remortgaging, there may be fees to pay to your existing lender for switching, so it’s important to have a chat with your bank before committing to ensure that remortgaging would be a cost-effective solution for you. Check out our mortgage guides for more information.

Borrowing More from your Existing Lender

Another option available to homeowners who have borrowed from select banks is to go down the remortgaging route with their existing lender. Some banks will approve additional borrowing, often up to around 80 percent of the property’s value in total, so the more equity you have, the more you could borrow. This option can be very helpful if property prices in your area have failed to reach expected market values, and you’re concerned that you will be unable to achieve asking price for your property. With Settled, 98 percent of properties receive an offer of asking price or above, but recent reports suggest that some homeowners are significantly reducing asking prices in order to make a sale.

Remortgaging in this way could not only provide you with additional funds required to complete your move without added financial stresses, but also contribute significantly towards any necessary home improvements or renovations on your new property. After all, it’s important to put your own stamp on things in order to feel settled in your new home and really make it your own.

Moving Doesn’t Have to be Stressful

As we all know, moving can be one of the busiest, and sometimes most stressful times of our lives, but it doesn’t have to be. The good news is that finances are just one aspect of moving that we don’t want our customers to worry about. So here at Settled we've teamed up with Habito so you can arrange the best mortgage for your home as simply as possible.