Moving House? Here’s What You Need to Know About Keeping Your Mortgage

Relocating to a new home is exciting, especially if you’re upgrading or finding a place that better suits your lifestyle. But what happens to your existing mortgage when you move? Can you bring it with you?

The good news is that many homeowners have an option called home loan portability, sometimes referred to as substitution of security. This feature allows you to transfer your current mortgage to a new property, avoiding the need to apply for a brand-new loan.

Why Consider Home Loan Portability?

Opting to transfer your existing mortgage to your new home can offer several advantages:

• Keep your fixed interest rates: If your current rates are lower than what’s currently available, portability can save you money.
• Avoid break fees: Moving your mortgage means you may not need to pay fees for ending your loan early.
• Skip the hassle of reapplying: Keeping your existing loan means you’re not starting from scratch with a new loan application, unless you need to increase your lending.

For many homeowners, home loan portability can be a convenient and budget-friendly solution—but it’s not always the best fit for every situation.

Things to Consider

While home loan portability has its perks, it’s worth evaluating whether your current loan terms are still the most competitive option available. Other lenders may offer better interest rates or loan features, which could make refinancing a smarter (and more affordable) move. A mortgage adviser can help you compare your options and determine the best strategy for your financial goals.

Eligibility Requirements for Home Loan Portability

Like most financial products, home loan portability comes with certain conditions, which vary between lenders. Here are some key factors to keep in mind:

• Settlement Timing: Both the sale of your current home and the purchase of your new one need to settle on the same day.
• Deposit Requirements: You’ll still need to provide a deposit for your new home, so having funds on hand is essential.
• Property Valuation: lenders may require a valuation of your new property to ensure it meets their criteria, however, this is very much a case by case basis, so talk to us first.
• Loan Amount: Typically, the loan amount for your new property needs to match or be less than your existing loan. Some lenders may allow you to borrow more, but this often requires a separate loan application with potentially different terms.
• Borrower Details: The mortgage must stay in the same name(s) as the original loan. If ownership details change, portability may not be an option.

Is Home Loan Portability Right for You?

Every homeowner’s situation is unique, and the right choice depends on your individual financial circumstances and property goals. That’s where getting expert advice comes in. A mortgage adviser can help you assess whether portability is the best option, or if refinancing might be the better option. 

If you’re planning a move and want to explore your home loan options, Loan Market Dunedin is here to help. Our team can review your current loan and guide you through the process to ensure your lending solution aligns perfectly with your needs.

Get in touch with us today to discuss your plans and take the next step toward your dream home!