The Client
A young couple with a child, owning their residential home. One works full time, the other part time while caring for their children. They’d recently remortgaged onto a five-year fixed rate deal.
The Objective
To buy a larger property that had become available through the deceased estate of one partner’s father, without triggering an early repayment charge on their existing five-year fixed rate, and while making sure the other beneficiary of the estate received their share of the inheritance.
The Situation
The property came with an equity loan attached, along with other charges, and formed part of an estate split between two beneficiaries. Their existing mortgage was only recently fixed for five years, so any route that broke that deal outright risked a significant early repayment charge.
The Challenge
Structuring this meant satisfying several things at once: avoiding the early repayment charge, raising enough additional borrowing to fund extensive renovation works, using the inheritance itself as a discount against the purchase price, and doing all of that within a lender’s unusually restrictive criteria around how the equity could be used.
What We Did
We arranged to port the existing mortgage across to the new property rather than remortgaging outright, avoiding the early repayment charge entirely. We then structured additional borrowing on top to fund the renovation works, working within the lender’s specific criteria on how the equity from the inheritance could be applied, while making sure the other beneficiary still received their full share.
The Solution
Porting the mortgage and topping it up with further borrowing worked out considerably cheaper than either remortgaging elsewhere or pursuing development finance, both of which would have carried costs and penalties that made the purchase impractical.
The Outcome
The purchase completed, with monthly payments comfortably within budget despite the new property being considerably larger, with land and room for the family to grow. Renovation works were able to start as soon as planning permission for the extension came through.
Conclusion
Breaking a fixed-rate deal early is rarely the cheapest way to move to a bigger property, and this case had the added complexity of an inherited estate split between two beneficiaries with restrictive lender criteria on the equity involved. As a whole-of-market broker, structuring the move around porting the existing mortgage rather than starting fresh avoided the early repayment charge and made the numbers work for a property that would otherwise have been out of reach.
Frequently Asked Questions
What does it mean to port a mortgage?
Porting means transferring your existing mortgage deal, including its rate and terms, onto a new property rather than ending it and taking out a new one. It’s typically used to avoid an early repayment charge when moving home during a fixed-rate period.
Can I add extra borrowing when I port my mortgage?
Often, yes. Most lenders that allow porting will also let you top up the loan with additional borrowing at the same time, subject to affordability and the lender’s specific criteria.
How does inherited equity affect a property purchase?
It depends on the lender and how the equity is structured. Some lenders have specific rules on how inheritance-linked equity can be used toward a purchase, particularly where an estate is split between multiple beneficiaries who each need to receive their share.
Is porting a mortgage cheaper than remortgaging?
It can be, particularly if you’re partway through a fixed-rate deal. Porting avoids the early repayment charge that a full remortgage or refinance elsewhere would trigger.
Final Thoughts
UK Mortgage Broker is a whole-of-market broker helping clients throughout the UK and globally to secure funding on UK property. We are directly authorised and regulated by the Financial Conduct Authority. Your home may be repossessed if you do not keep up repayments on your mortgage.
Call: 01628 969 500
Email: info@uk-mortgagebroker.co.uk
Related Pages
- Residential Mortgages – whole-of-market advice for main home purchases across the UK.
- Can I Get a Mortgage in the UK? – how deposit, income and credit profile determine eligibility.
- How Lenders Actually Check Your Income – how different income types and multiple applicants get assessed together.
- Buy to Let Mortgages – whole-of-market advice for landlords and property investors across the UK.