What will happen to my mortgage when I move home?
Some say it’s one of the most stressful things you’ll ever do – from the moment you start searching for the perfect property, to the day the removal company trucks roll in.
But moving house doesn’t have to be a financial headache. You can make things easier by understanding the potential impacts, and preparing well.
Whether you’re upsizing to accommodate a growing family, or downsizing to free up money, you’ll likely need a mortgage for your new home, even if you already have one on your current property.
The good news is that you have options, from porting (taking your existing mortgage with you) to closing your current mortgage and taking out a new one.
Can I move my existing mortgage to a different house?
Usually yes, as most mortgages are portable – meaning you can transfer it from where you live now to your new property.
If you choose to ‘port’ your mortgage, your current provider will first value your new property to see if you need to borrow more money to get the mortgage you need. There are pros and cons to porting your existing mortgage:
Pros
- Porting your mortgage typically takes less time and effort than searching out and securing a new mortgage
- If you have a good rate and terms on your existing mortgage, you may be able to transfer them to your new property
- If you have early repayment or exit fees on your mortgage, you usually won’t have to pay them to port
Cons
- You may have to pay a fee to increase your mortgage if you’re moving to a more expensive property, as well as paying to get it valued by your current provider
- You risk missing out on any better mortgage interest rates that other providers may offer
- If you need to borrow more money for your new property, porting means you’ll have to settle for whatever rates your current lender offers
Can I get a new mortgage with a different provider when I move home?
Yes – by ending your current mortgage and getting a new one altogether, either from your existing provider or a new one. As with porting a mortgage, there are pros and cons of remortgaging:
Pros
- You have the freedom to search the market and compare mortgages, which may offer better rates than your current one
- You may want to take this opportunity to change to a different type of mortgage interest rate – whether fixed, variable or tracker – in which case you’d need a new mortgage deal
Cons
- You may have to pay early repayment or exit fees if they apply to your current mortgage
- It’s often more time-consuming to search for and secure a new mortgage
How can I improve my chances of getting credit to move house?
A mortgage is likely to be one of the biggest financial responsibilities you’ll take on, so it’s important to be prepared and understand what a mortgage provider will expect of you. Even if you have an existing mortgage, providers will still check your credit history before offering you a deal, and the better your credit history, the better the deal you’ll be able to get.
There are plenty of things you can do to make sure your creditworthiness is as good as possible before changing your mortgage, from making sure your credit report is correct and up to date, to improving your credit score with simple actions and repayment strategies.
Want to know where you stand with lenders? Check your Experian Credit Score to get started.
How will moving house affect my finances and credit score?
Moving house inevitably comes with costs, which might include stamp duty, legal costs, mortgage broker fees, property valuation fees, or charges for paying back and exiting your current mortgage early. Then there are the other things that may not immediately jump to mind:
- Moving fees like removal vans and storage space rental
- You may need to cater for redecoration and home improvement costs
- You may need to change your household bill payments and direct debits for things like gas, electric, water, and council tax
- You’ll need to arrange new buildings and contents insurance, and pay management fees if you live in a shared building like a block of flats
Moving house itself won’t affect your credit score, but the financial factors involved in moving can have an impact, so it’s important to keep an eye on your credit score and report. Remember too, that applying for a mortgage will leave a record on your credit report, and too many applications in a short space of time may reduce your credit score. So, it’s well worth comparing different mortgages before applying to find the right deal for you.
How can I protect my credit rating when I move house?
Here are some steps you can take to help protect your score when you move house:
- Try not to apply for mortgages multiple times over a short period, as this may reduce your score
- Avoid identity theft by rerouting all your post to your new address. As well as updating your address with all your accounts and services, you can also put a temporary redirect from your old address to your new one with the Post Office, so nothing slips through the net. Note that if you do become a victim of fraud, any damage to your score should be corrected quickly by your lenders.
- Once you’re at your new address, remember to update your details on the electoral roll, which will help lenders identify you and reduce your chances of being a victim of fraud.
- Try not to apply for credit at your new address until you’ve updated your details on the electoral roll, as you’re more likely to be rejected, which will leave an alert on your credit report.
- Check your credit report to make sure it’s accurate and up to date with your new address details, so nothing is recorded on your report by mistake that could affect your score