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Moving house? Take your home loan with you

Moving house? Take your home loan with you

Most home loans are set for 25 or 30-year periods, but you would be hard-pressed to find someone who lives in the same house for the entire lifespan of their mortgage.

The ability to transfer your home loan from one house to another is an increasingly attractive loan feature in a world where convenience is paramount.

Loan portability, as this feature is known, is available on a growing number of home loans. Of the 1262 home loans monitored by RateCity, 1143 offer mortgage portability – that’s more that 90 percent.

Interestingly, home loan portability is a relatively new feature, having been gradually introduced by lenders over the past eight years.

The benefit of home loan portability is that you won’t need to make any changes to your direct salary crediting and your automatic direct debits can continue without interruption, saving you the time and hassle of setting them all up again under a new mortgage. It’s a faster, more streamlined process.

As well as saving you time and paperwork, taking your mortgage with you from one house to another can save you money. While mortgage exit fees are now banned, most lenders still charge establishment fees on new loans. The amount ranges from loan to loan, but it can be upwards of $800.

Some home loan packages include portability free of charge, but others carry a portability fee. However, this is a flat fee regardless of the loan size and is generally a smaller amount than an establishment fee. ANZ, for example, charges a $320 portability fee, partly to offset the cost of lodging a new security document for the loan.

An ANZ spokesperson said: “Portability loans provide customers with flexibility of finding the right home and loan structure to suit their needs.”

By carrying across the same home loan to your new home, you can also retain the same home loan account number.

If you already have a home loan, check with your lender if this is part of your loan. If you are applying for your first home loan, make sure you ask about loan portability to leave your options open.

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