Selling house and buying another mortgage: your options explained

Selling house and buying another mortgage options fall into three main routes: porting your existing deal to the new property, paying off your current mortgage and taking out a new one, or using bridging finance to buy before your existing home sells. Whichever route fits your situation, the process starts the same way - your solicitor uses the proceeds from your sale to redeem your current mortgage on completion day.

Mortgage redemption is the full repayment of your outstanding mortgage balance, typically arranged by your solicitor on completion day using the proceeds of your sale. If your sale price is higher than your outstanding balance, you keep the difference as equity towards your next purchase.

Each of the three routes below has different implications for your interest rate, any early repayment charges, and how quickly you'll need to complete on your next purchase. Advisors are regulated by the Financial Conduct Authority, and you can check any firm's authorisation on the Financial Conduct Authority register before you take advice. For general guidance on moving home mortgages, visit our moving home mortgage hub.

What is mortgage porting?

Porting means transferring your existing mortgage, along with your current interest rate and any special terms, from your old property to your new one. It isn't an automatic right - it's a discretionary process controlled by your lender, and you'll still need to pass a fresh affordability assessment based on your current income, outgoings and credit history.

Not every mortgage is portable. Check your original mortgage offer or ask your lender directly before you commit to selling, as some deals, particularly certain fixed and specialist products, don't allow it. Our guide to porting a mortgage explained covers the mechanics in more detail.

When porting makes sense

Porting tends to make the most financial sense when you're part-way through a fixed or tracker deal with a competitive rate, when exiting your current deal early would trigger an early repayment charge, or when your income and circumstances haven't changed much since you last applied.

As an example, if you have £250,000 remaining on your mortgage and your lender would charge a 3% early repayment charge to exit early, that's £7,500 you could avoid by porting instead of paying off your mortgage in full and starting fresh elsewhere.

What if the new property costs more?

Porting only covers the amount you already owe. If your new home costs more than your current outstanding balance, you'll need to borrow the difference as a top-up, usually arranged as a second part of your mortgage at your lender's current terms rather than your original rate. Some lenders insist both portions sit with them rather than allowing you to split borrowing across two providers.

Reasons lenders refuse porting

Even if your mortgage is technically portable, your lender can still say no. Here are the most common reasons why.

How a new mortgage works when you move

If you pay off your existing mortgage in full on completion, you're able to arrange new borrowing for your next property. The equity released from your sale, the difference between your sale price and your outstanding mortgage, typically goes towards your new deposit, and you then apply for a mortgage based on your current income, the new property's value, and today's lending criteria. It's worth checking how much can I borrow when moving home before you start viewing properties, so your expectations match your budget.

This route is often the strongest option if your current deal is close to ending anyway, or if any early repayment charge is low enough to be outweighed by access to a wider choice of lenders. Because you're not tied to your existing lender, an advisor can compare a wide range of lenders on your behalf rather than relying on whatever your current provider offers.

Porting vs a new mortgage: which is cheaper?

There's no single answer - it depends on your existing rate, how long is left on your deal, and whether an early repayment charge applies. The table below sets out the main trade-offs.

What is a bridging loan?

A bridging loan is a short-term secured loan, typically lasting from a few months up to eighteen months, that lets you buy your new home before your current property has sold. Interest is usually rolled up rather than paid monthly, with the loan and interest repaid in one go once your existing home sells.

Bridging loan: a short-term secured loan used to bridge the gap between buying a new property and completing the sale of your existing one.

When bridging finance is the right option

Bridging finance tends to suit a narrow set of circumstances, such as when you've found the right property before your own home is under offer, when you're in a fast-moving local market, or when a buyer above you in the chain has pulled out and you need to protect your onward purchase.

Bridging finance is considerably more expensive than a standard mortgage. Interest is charged monthly at a higher rate than you'd pay on a mortgage, and lenders usually add an arrangement fee on top of the loan value. Because of these costs, a bridging loan should only ever be used with a clear exit strategy, normally the sale of your current home or a switch to a standard mortgage once your circumstances allow.

If your sale is delayed, interest keeps building, so it's worth speaking to an advisor about how realistic your timeline is before committing. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

If you're worried about managing existing debts or aren't sure bridging finance is right for you, MoneyHelper offers impartial and confidential guidance on 0800 138 7777.

An early repayment charge is a fee your lender applies if you pay off your mortgage, or a large chunk of it, before the end of a fixed or introductory rate period. Early repayment charges typically range from around 1% to 5% of your outstanding balance, and the exact percentage often reduces the closer you get to the end of your deal.

Before you put your house on the market, check your mortgage offer or call your lender to find out whether an early repayment charge would apply and how much it could cost. Porting your mortgage usually avoids the charge altogether, since you're not technically ending your deal, you're moving it. Paying off your mortgage in full and taking out a new one elsewhere, however, will trigger it if you're still within the charge period.

Some lenders offer a porting window, often somewhere between three and six months, giving you time to find and complete on a new property without losing your existing rate. Ask your lender how long your window is as soon as you start planning your move.

Selling and buying at the same time means coordinating two completions, yours and your buyer's, on the same day, which is where most of the stress of moving home comes from. If your buyer pulls out after you've already committed to your own purchase, you can be left needing to fund your new home without the sale proceeds you were relying on.

Bridging finance, covered above, can act as a safety net if your chain breaks after you've exchanged contracts on your purchase, giving you time to find a new buyer without losing your onward move.

• Instruct your solicitor as early as possible so completion dates can be flagged and aligned across the chain
• Keep in regular contact with your estate agent about how your buyer's own chain is progressing
• Have a contingency plan, such as short-term rental or bridging finance, in case your dates don't line up

Getting a moving home mortgage in principle sorted early shows sellers you're a serious buyer and helps you move quickly if your timeline tightens.

Alongside your mortgage decision, moving home comes with a range of other costs to budget for. The table below sets out the typical costs involved, though your own figures will depend on your mortgage balance, property value, and the solicitors and surveyors you use.

Stamp Duty Land Tax is charged on most property purchases in England and Northern Ireland, and the amount depends on the price of the property you're buying and whether you own another property at the time of completion. You can check current thresholds on the government's Stamp Duty Land Tax guidance.

Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it, so it's worth building a realistic picture of all these costs before you commit to a purchase.