Moving home with your mortgage

What does transferring a mortgage actually mean?

A mortgage is the security registered against the property. The home loan is the money you owe under the lending contract. When people talk about transferring a mortgage, they usually mean asking the lender to keep some or all of that lending while replacing the old property security with the new one.

The Reserve Bank describes portability as shifting a loan from one property to another without increasing its value. Its debt-to-income rules recognise this category, but they do not require a bank to approve your move. Treat portability as an option to investigate, not a feature you already own.

Start with the next property and your actual numbers

The lender may look again at your income, expenses and current debt, as well as the next home's value, title, condition and insurability. A cheaper home does not automatically mean all the existing debt can follow it. Ask for a written before-and-after picture showing the sale proceeds, retained loan, any additional borrowing, fees and expected repayments.

Use the net amount available after repaying lending and paying sale costs, not the headline sale price. If the purchase needs extra borrowing, that increase is a separate approval question. If the next property gives the lender less acceptable security, the lender may require a smaller retained loan, more equity, another valuation or different terms. Only the lender can confirm its decision for the actual borrowers and property.

Can you keep an existing fixed rate?

Do not assume the rate moves simply because you stay with the same lender. Ask about every fixed and floating portion. The lender might let one portion continue, require another to be repaid, and price any extra borrowing separately. The answer should identify the balance, rate, remaining fixed term and repayment basis for each part.

Consumer Protection explains that changing a fixed rate or term can involve break fees. Your loan documents may also contain cash-contribution repayment terms. Ask for the dollar cost of each proposed route rather than deciding from the advertised rate alone.

Make settlement timing part of the approval

Aligned settlements can let your lawyer direct sale funds into the purchase and coordinate the change in security. However, a linked chain has more points where timing can slip. Settled's settlement guide explains that lawyers or conveyancers coordinate the payment, ownership transfer and mortgage registration.

If you buy before selling, you may need bridging finance. If you sell first, the old lending may be repaid before you buy, which can change what terms are available later. Have your lender and lawyer confirm the proposed sequence before signing, including what happens if a date changes.

Ask for a delay plan as well as the ideal sequence. Confirm whether funds can still be released, whether default interest or extra fees could arise, how keys and removals will be handled and who must be contacted first. Settled notes that settlement involves several parties acting in sequence and recommends allowing for possible delays when booking the move.

Keep each professional in their lane

Your lender or mortgage adviser confirms approval, rates, fees and repayment terms. Your lawyer checks the loan and property documents, agreement conditions and settlement mechanics. Your insurer confirms cover. Your agent can help with likely sale timing and negotiating dates, but a promising campaign timetable is not finance or legal approval.

Give everyone the same figures and dates. Include likely net proceeds after the mortgage and selling costs, not simply the expected sale price. If a price, condition or date changes, take the revised plan back to the lender and lawyer before agreeing to it.

Frequently asked questions