The Picnic Guide To Mortgages For Home Movers

Let’s be honest, moving house can feel like chaos. But when it comes to your mortgage, it doesn’t have to be. Whether you're climbing the ladder, downsizing, or relocating, there are plenty of choices available, and we’ll walk you through everything you need to know, so you’re completely prepared.

How Easy Is It to Move House with a Mortgage?

Moving home while still paying off a mortgage is pretty common and generally straightforward. Most lenders offer a range of flexible solutions for homeowners looking to relocate, including porting your existing mortgage or applying for a new one. The key is understanding your options and planning ahead.

What Happens to Your Existing Mortgage?

When you sell your current home, your existing mortgage is usually repaid using the proceeds from the sale. But if your mortgage is "portable," you can transfer it to your new property. This process is known as porting, which allows you to keep your current interest rate and terms. 

It’s important to note that porting only applies to your existing mortgage deal, but NOT the mortgage loan amount. So, you’ll still need to pass the standard affordability checks to get approval from your lender. 

Want to know more? Take a look at our guide to Mortgage Porting. 

What Mortgage Options Are Available?

Remortgage

Remortgaging means paying off your existing mortgage and taking out a new one, either with your current lender or a different one. This option could get you a better deal if more competitive interest rates are available or if your current mortgage isn't portable. 

Be aware, though, of potential early repayment charges if your existing deal still has some time to run. 

Borrow More on Your Existing Mortgage

If you're moving to a more expensive property, you might need to borrow additional funds. You can either remortgage (as above) for the new amount, or some lenders allow you to increase your existing mortgage to cover the difference. This may involve taking out a separate loan segment, possibly at a different interest rate.

Porting

Like your current mortgage deal? Take it with you. Porting lets you transfer it to your new home. You’ll avoid early repayment charges, but you’ll still need your lender’s green light.

Second-Charge Mortgage

A second-charge mortgage lets you borrow against your home without changing your existing mortgage. But, it also means you’ll have two separate mortgage repayments each month, making it slightly more complex when you're working out your budget. 

New Mortgage

If you own your current home outright and the one you want to buy is worth more, you will need to apply for a new mortgage to cover the difference. This involves re-introducing yourself to the standard affordability assessments and lender eligibility requirements. 

Benefits of Staying with Your Current Lender

Sticking with your existing mortgage provider when you move home can be convenient and financially savvy under the right circumstances. Advantages include:

• Porting convenience: You may be able to move your mortgage without paying early repayment charges.

• Relationship leverage: Your existing customer status may help with approvals or secure preferential rates.

• Less disruption: Avoids the need to undergo a full remortgage application process with a new lender.

Benefits of Switching to a New Lender

Switching lenders (also known as remortgaging) can often work out for the best in the long run, especially if more competitive deals are available. Advantages of taking this route include: 

• Lower interest rates: New lenders may offer competitive introductory rates or other incentives.

• Flexible features: Access to a wider range of mortgage types, payment holidays, or more favourable terms all round.

• Higher borrowing potential: Some lenders may allow you to borrow more based on their affordability criteria.

• Eligibility criteria: Your new lender could be a better fit if you’re looking to buy a unique type of property or have a more complex income.

How Much Can a Home Mover Borrow?

The amount you can borrow for a mortgage depends on several factors, including your income, existing debts, credit history, and the value of the property you're purchasing. Lenders typically offer between 4 to 4.5 times your annual income, though this can vary. These factors apply whether you’re a serial home mover or a first-time buyer. 

Do You Need a Deposit when You Move Home?

Yes, but the equity that’s built up from your current property can often serve as your deposit. For example, if your home sells for £300,000 and you have £200,000 remaining on your mortgage, the £100,000 difference can be used as a deposit for your next home.

Most mortgage lenders need at least a 5% deposit, so if you’ve lived in your current property for several years, then the equity should hopefully cover the amount you need, depending on the value of the property you want to buy. If not, you may need to top this amount up from your savings. 

Does Moving Home Affect Your Credit Score?

Moving house itself doesn't directly impact your credit score, but certain related activities could. Lenders also prefer to see stability, so frequent house moves might also raise concerns. 

To reduce any possible impact on your credit rating, you should: 

• Update your address with banks, utilities, and the electoral register once you’ve moved into your new home (don’t wait too long!). 

• Avoid making any new credit applications around the time of the move.

• Continue paying all your monthly bills and other financial commitments on time.

• Shy away from moving homes within three years of the last if it can be avoided. 

How Much Stamp Duty Will You Pay?

Stamp Duty Land Tax (SDLT) applies to most property purchases in England and Northern Ireland. As a home mover, you will not be eligible for first-time buyer relief. 

Here's a breakdown of the current SDLT rates (as of April 2025):

So, based on current rates and thresholds, let’s say you’re moving to a property valued at £500,000. The stamp duty liability would work out as follows:

• 0% on the first £125,000 = £0. 

• 2% on the next £125,000 = £2,500. 

• 5% on the next £250,000 = £12,500.

• Total stamp duty = £15,000. 

What Happens when You Downsize?

Downsizing means selling your current home and moving to a less expensive one. This can free up equity, reduce your mortgage or even allow you to buy outright. 

For example, if your current home is worth £250,000, with an outstanding mortgage balance of £100,000. You could clear your entire mortgage and still look at properties worth up to £150,000 for your next move. 

Alternatively, you could keep your existing mortgage when you move (if your lender allows porting) or remortgage for the same amount but onto a more competitive interest rate. Be aware, though, that by downsizing and keeping your mortgage, your overall loan-to-value (LTV) would increase, meaning the interest rates available could be higher. 

A third option would be to pay down part of your mortgage with the proceeds of your current property and reduce your monthly repayments for your new home. 

Key benefits of downsizing include:

• Smaller monthly repayments or mortgage-free living

• Lower running costs (e.g., energy, maintenance, council tax)

• Potential to release cash for retirement, travel, or family support

However, downsizing might still involve:

• Moving costs (removals, surveys, solicitor fees)

• Stamp duty (though usually lower than for upsizing)

• Emotional adjustment to a smaller space or a new location