Mortgage Porting; am I being stupid?

chris344

Slightly confused, please help.

Also, how does porting work.

Let's say:
Current place sells for £650k
New place cost £450k
Port £358k mortgage
Difference £92k

Am I working it out right that if the above happened then we'd have a new place with a £358k mortgage and £558k from the sale of our current place? Or am I being stupid somewhere.

kingstreet

You sell your current property for £650,000.

Your current mortgage of £358,000 is repaid.

Before fees and costs are deducted, you have £292,000 left over

You are buying for £450,000.

You apply to your current lender for a new mortgage of £358,000. You port the rate from the old mortgage to the new one.

Of the £292,000 you have left over, £92,000 is transferred to your solicitor to make up the amount you need to purchase the new property.

Whatever you have left over is yours to do with what you will, after fees and costs have been covered, of course.

Acceptance for the new mortgage is subject to the lender's current criteria and affordability. You can't transfer a mortgage from one property to another, so you are applying for a whole new £358k mortgage and will be vetted like any other borrower.

From next month, lender affordability models will tighten considerably when they become "MMR-Compliant" following the FCA's mortgage market review plans introduction on 26 April.

chris344

Thank you - that's very, very helpful.