Intelligent Finance Porting Mortgage: A Smart Move?

Porting your mortgage, which involves transferring your existing home loan to a new property, can be a strategic financial maneuver. Intelligent Finance (IF), a UK-based online bank, offers a porting option that’s worth considering if you’re planning a move. The decision hinges on understanding the benefits and potential drawbacks, and how IF’s offering aligns with your specific needs.

Advantages of Porting with Intelligent Finance:

• Preserve Favorable Terms: One of the primary advantages is maintaining your current interest rate and repayment terms. If you have a low fixed-rate mortgage, porting allows you to avoid the higher rates that might be available on new mortgages. This can translate into significant long-term savings, especially in a rising interest rate environment.
• Avoid Early Repayment Charges (ERCs): Leaving your mortgage before the fixed-term ends often triggers ERCs. Porting sidesteps these charges, saving you potentially thousands of pounds. With IF, this benefit is usually the most attractive aspect of porting.
• Streamlined Application Process: Porting is generally simpler than applying for a new mortgage. IF already has your financial information on file, potentially reducing the paperwork and processing time. However, you will still need to demonstrate affordability and meet IF’s lending criteria for the new property.
• Flexibility with Additional Borrowing: Often, the new property will be more expensive, requiring additional borrowing. IF typically allows you to borrow extra funds alongside the ported mortgage. The interest rate on this additional borrowing may differ from your existing mortgage rate.

Potential Drawbacks to Consider:

• Affordability Assessment: IF will reassess your affordability based on your current income, expenses, and the new property’s value. Changes in your financial circumstances could impact your eligibility. A decline in income or increased debts might lead to your porting application being rejected.
• LTV Requirements: Loan-to-value (LTV) ratios are crucial. If your new property requires a significantly higher deposit, you might face challenges in securing the required funding. IF has specific LTV criteria for ported mortgages.
• Potential for Blended Rates: If you need to borrow more money on top of your ported mortgage, IF will likely offer a blended interest rate, reflecting a combination of your existing rate and the rate applicable to the additional borrowing. This blended rate may be less attractive than a new mortgage deal from another lender.
• Limited Flexibility: While porting retains your existing terms, it might limit your flexibility. You might miss out on more competitive deals or innovative mortgage products offered by other lenders.

Is Porting with Intelligent Finance Right for You?

Before deciding to port your mortgage with IF, carefully compare your options. Get a professional mortgage advisor to assess your situation, review your potential savings, and explore alternative mortgage deals. Consider factors like interest rates, fees, flexibility, and your long-term financial goals. If preserving your current interest rate and avoiding ERCs are paramount, and you meet IF’s lending criteria, porting could be a smart move. However, a comprehensive comparison is essential to ensure you’re making the best financial decision for your circumstances.