No. You can’t move house. Or have children - lenders refuse to let customers move mortgages

21 June 2011

keysDepending on where you look, some reports are showing a tentative recovery in the housing market in some areas of the UK. But don’t worry, it won’t last long, not if the banks have anything to do with it that is.

More and more lenders are now preventing borrowers from taking their mortgages with them when they move home, known as ‘porting’, claiming they fall foul of tougher qualifying criteria, or their circumstances have changed, even if work/employment details have remained constant.

The Financial Ombudsman Service has expressed concern over a massive rise in complaints from homeowners who have been prevented from porting their mortgages when moving house. The Ombudsman received over 7,000 complaints about mortgages in the 12 months to April this year, and it upheld more than a third of those. It said one in every ten complaints now involves porting. It’s big business, both for those trying to move, and for the lenders themselves.

The crackdown affects both those lucky people on a rock bottom standard variable, as they may not be allowed to take their favourable rate with them, but also those on fixed rate deals facing huge early-redemption penalties if porting is denied. Penalties can be up to 8% of the outstanding balance, working out at £12,000 on a £150,000 loan

This comes as figures from a recent report for the trade body the Council of Mortgage Lenders suggest that, each year, 51% of homeowners who want to move will not be able to because of tighter rules, almost 100,000 homeowners could be blocked from moving either by porting their loans or remortgaging, and 173,000 may not be able to borrow the same size of home loan, forcing them to downsize. It’s all looking pretty grim.

The Sunday Times managed to find a married opera-singing couple who were denied the opportunity to port their mortgage on 2.5% SVR. Their circumstances had changed with the addition of a baby daughter, and their lender, Nationwide, said having a child could affect how much a customer could borrow. So don’t even think about having any of the expensive little blighters if you want to move house.

In theory, most lenders should allow you to take an existing loan and transfer it to a new property, providing the new house is worth no more than the current property. But more problems arise if you need to borrow more, as you will typically have to arrange a further advance, at current (potentially rubbisher) interest rates.

Customers of Bradford & Bingley or Northern Rock’s ‘bad’ list, both now controlled by Northern Rock Asset Management, cannot port while taking a further advance, in effect forcing them to trade down. However, it introduced an exit penalty waiver this year, letting borrowers find a new deal fee-free. State-owned Northern Rock charges borrowers half their exit penalty, known as an early repayment charge, to port their loan if they need to borrow more.

Halifax allow you to port a short-term fixed or variable deal, provided you surrender your attachment to its relatively low SVR, currently 3.5%. Borrowers on interest-only terms will have to have at least a 25% deposit to port their mortgage at Santander, Lloyds Banking Group, including Halifax, as well as Barclays and Northern Rock, or move to a more expensive repayment deal instead.

The Financial Ombudsman considers that, in such situations, it would be fairer for the lender to waive its exit penalties, so if you are getting shafted by a greedy lender and get no joy after complaining to your them in writing, get them on your case (0800 023 4567). Now go.

TOPICS:   Banking   Mortgages


  • Dick
    On the positive side, it should help end programmes like Escape to the Countryside. Sarah Beeny will be fucked. Although would make her pregnant again and she'll find some other crap to present so she can waddle around on our TV screens.
  • The B.
    In the case of fixed mortgages I'd have to query why anyone would take one out (they make the early redemption penalties very clear) without considering that it might not be portable, I've always assumed that they weren't anyway.
  • Mark H.
    @ The Real Bob Why would you assume that? If you take a 5 or 10 year fixed deal there's every chance you will want to move house in that time. Mortgages were always portable - it's just the banks taking advantage of the current situation (caused by themselves!).
  • The B.
    Why would anyone take a 5 or 10 year fixed deal? That's an insane risk, if you'd locked yourself in at a fixed rate at the beginning of the crash when rates started going up you'd now be stuck on about 6.5% as opposed to the BOE rate of 0.5%, which admittedly in real terms is about 3.5-4% but still, a damned site less. A 2-3 year fixed I could understand as a precautionary measure but anything that long term is sheer madness.
  • Richard M.
    I have a £45,000 mortgage on a £275,000 house. Have never missed a mortgage payment in my life and have a blemish free credit record. My mortgage has 11 years to run. So last year I was surprised when my bank (Co-Op) turned me down for a further advance (for new windows) of just £8000. I never got a fully satisfactory answer as to why they refused my application, though I think it may have something to do with my salary being made up of a low basic plus commission - which is how I have been paid for over 30 years. So imagine my surprise when the Co-Op mortgage advisor suggested I try extending my existing Co-Op personal loan (which I had had for a few years to buy a car) to cover the additional £8000 I required. So he put me through to the personal loan department who agreed immediately to my request for £8000! So the same bank lent me a further £8000 on an un-secured personal loan yet refused to give me a further advance on my fairly modest mortgage. Bizarre! So if this is how banks are dealing with mortgage requests (irrespective of whether for home improvements or moving house) it is little wonder the housing market is going nowhere.
  • How P.
    Moving house are the most stressful things in life. How to move But with a little planning and our guide you can take the strain out of your move. Start your move at least a month ahead of time, so you have time to pack and take care of other tasks, such as selling your house or saying goodbye to friends and family members. Take an inventory of your possessions. Use this list to determine the number of boxes and the size of the truck you will need for your move. Think carefully about what you really need to take with you and what might be cheaper to replace or rent.
  • letting a.
    Hello there, I found your website by way of Google even as looking for a similar matter, your website got here up, it seems great. I have bookmarked to favourites|added to my bookmarks.
  • Nationwide y.
    Been trying to sell my house for ages to pay off my debts and wanted to port my existing low rate Nationwide mortgage (no additional borrowing required) to a new build 15K cheaper. I'm permanently employed and would still have 60% LTV - a good size buffer - so didn't think it would be a problem. No CCJ's, defaulted payments on anything like that so no black marks. Finally managed to get my asking price after 18 months only to be told by NW that I can't port my mortgage because "I have had credit cards in the past" (which I am paying off in full through the move) and "I might have credit cards in the future", neither of which I can do anything about although I am trying to act responsibly in paying off what I owe with any perceived risk easily covered by my LTV. Where does that leave me?! And all from a bank which got downgraded last year because it was incapable of managing its own books. Bunch of f*cking monkeys who incidentally didn't think affordability was a problem when they were screwing me over for the last 5 years on a 5.6 fixed interest rate. Now looking for a reputable lender - will be worth paying more not to have to deal with the likes of that shower. FSA sort them out, they're an embarrassment!
  • John M.
    I had a Midland Bank Mortgage of 60k which was about 35% of the property value. I ported it around five homes over 12 years (much of that being Thatcher times). Each move cost me house movers, the adverts and selling and a fee for Midland... this last being about 250.00 each time. I moved up market and then down market, and the lender was happy to support. The current problem was caused by lenders (in general the banks) throwing funds at anyone and anywhere and any property on the assumption that capital would grow. Well it didn't and the banks etc. being "experts"... at least they said they were.... turned out to be idiots with no idea of responsibility. Now they they are putting families into traps. There are more stories every day of home owners unable to move into higher value or lower value, all because the lender wants to charge enormous fees and then decide that the mortgage is non portable. For over three centuries we all assumed that banks existed to earn profits by lending money. Now they seem to think they can exist by charging fees and keeping cash to themselves. But after all why should home owners not suffer? After all, the banks take these same attitudes to small businesses. And yet both the Chancellor and Business Secretary - that's Dr Vince Cable in case you had forgotten - promise actions but do zilch!!
  • Fotogrametrie u.
    Its such as you read my mind! You appear to know so much about this, like you wrote the e book in it or something. I think that you just could do with some percent to drive the message home a little bit, but instead of that, this is excellent blog. A great read. I'll definitely be back.
  • Ted R.
    Prudent and responsible lending? We are attempting to downsize, the consequences of this will include a lower LTV, reduced mortgage payments and more free spend. The exercise will result in us meeting the old "golden rule" of 1/3rd into housing, 1/3rd into savings and 1/3rd to live on. Will the Nationwide port our mortgage (we're not asking for further borrowing)? No, they will not. When will bankers realise that "risk" assessed using credit scoring, while useful as an indicator, is no substitute for personal interviews and calculations based on affordability? We can clearly demonstrate that the "risk" to the Society will be significantly diminished but they plead "failed credit score" each time. For a lender to deliberately engineer a situation where hard working people are placed in a position where they could be made homeless is completely unethical. It shows mutuals as well as banks are run by people who are moral cripples and devoid of decency and respect for society.
  • Sally
    Can u advise me on my situation at the moment . I have been paying n/ram by bank Tranfer every month and I've had real big problems with them as in the past 6 month I've noticed that my bank Tranfer slip from Santander no longer states bank Tranfer to nram and they continually tell me tht it's fine and the Transfer money has been sent Yet nram states to me tht they have not received the payment. This has caused me me soo much problems and they continually tell me tht nram has sent the payment back to the bank but the strange thing is that the money is not In my Santander account and I've had to fax nram many times to tell them tht each month had been paid by transfer from Santander. Ime at the end of my tether with this continuous problem and I've even been receiving eviction notices. I received statement from nram telling me that no monthly payments have been received from Santander bank. I've had really bad experience with Santander dealings and have been told to fax them on again. I just have very bad feeling about the way Santander are dealing with my transfers which never seem to arrive at n/ram. On my nram statement for mortgage payments it states the wrong amount which was transferred to them from Santander therefore I'm going to have to open another acc with different bank as I don't trust Santander bank at all

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