Why can't I downsize and port some or all of my existing mortgage ?

Posted on 27 January 2016 by Richard


I currently have a mortgage with C&G taken 15 years ago for £395k. I want to downsize and port some or all of my existing mortgage. I will NOT pass the new affordability tests. I do not want to increase the mortgage term or borrow any more money yet C&G are still saying that I have to go through their criteria. According to the FCA they say their advice to lenders is that people in my position do not need to be tested. I wondered if you could shed any light on this or offer any advice. Many Thanks. Richard

Hi Richard,

Unfortunately this is a ‘Catch 22’ situation. You want to downsize but C&G will not allow you to port your existing mortgage to another property.

If you were to undertake a ‘Product Transfer’ or commonly known as ‘Rate Switch’ when your mortgage product rate comes to an end- lenders could subject to conditions switch you over to a new available rate without accessing affordability. This is because there is no material change in mortgage term or loan.

This is a difficult position to find yourself, but  lenders are well within their rights to ask you to meet their current criteria as what are you proposing would be classed as a new transaction i.e. effectively a new mortgage contract with new terms and conditions.

There are vast lenders available on the market and if you want to make the move then you might just have to redeem your existing C&G mortgage and proceed with the purchase with another lender whom is happy to lend based on your circumstances.

There are others things to consider before porting your mortgage. I would need to know the reason for the port? Does your existing mortgage have an early repayment charge or are you on a very cheap preferential rate? Once I have this information as well as full details of your income and expenditure, new property price and reason why you feel you won’t pass the affordability tests I could move forward with the enquiry.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.