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When you’re moving in the middle of your mortgage term, you might face penalties for breaking your mortgage contract.

That’s where mortgage portability comes in—a feature that allows you to transfer your current mortgage to your new home.

It can save you time, money, and keep your existing interest rate intact.

Today we’ll explore how it works, and if it is the right move for you?

Now, let’s dive in!

Mortgage portability allows you to transfer your existing mortgage to a new property without breaking the contract.

This means you can keep your current mortgage terms, including the interest rate, instead of switching to a new mortgage.

It’s particularly helpful when your current rate is lower than the rates available on the market today.

Porting a mortgage typically involves:

• Selling your current home and buying a new one within a lender-specified timeframe (usually 0–120 days).
• Requalifying for the mortgage and the new property
• Paying any additional fees or meeting conditions set by your lender.

For example, if you’re upgrading to a more expensive home, your lender might offer a “blend and extend” option, where your old interest rate is blended with the current rate for a larger loan.

Porting your mortgage comes with several advantages:

• Avoiding Prepayment Penalties: Breaking your mortgage contract mid-term can result in hefty fees, which portability helps you avoid.
• Keeping a Lower Interest Rate: If your current rate is lower than today’s market rates, portability allows you to keep your lower rate.
• Streamlined Process: Staying with the same lender can simplify the process and reduce paperwork.

While portability has its perks, there are some drawbacks to consider:

• Time Constraints: Most lenders require you to sell your current home and buy a new one within 0–120 days. This tight timeline might not work for everyone, and it’s different for every lender.
• Requalification Process: Your lender will require you to requalify for the mortgage, regardless of the value of the new home.
• Limited Options: You’re locked into your current mortgage term and rates, even if you need to change things up for the new property or there are better offers in the market.

Porting and refinancing both offer ways to save money when moving, but they’re not the same:

• Portability is best when you want to keep your current interest rate and avoid penalties.
• Refinancing may be a better option if current market rates are lower than your existing rate or if you need additional cash.

Use our Mortgage Payment Calculator to explore potential savings with each option.

• Is there a penalty for porting a mortgage?

No, as long as you meet the lender’s conditions, portability avoids the prepayment penalties typically associated with breaking a mortgage.

• Can I take over someone else’s mortgage when buying their house?

This is known as assuming a mortgage. While not the same as portability, some lenders allow buyers to assume the seller’s mortgage terms, subject to approval.

• Can I port a mortgage to a home with a different value?

Yes. For higher-value homes, you may need a blended rate or additional qualification. For lower-value homes, be cautious about exceeding prepayment limits to avoid penalties.

Mortgage portability is a powerful tool that can save you money and simplify the moving process.

By keeping your existing mortgage terms and avoiding penalties, portability allows for a smoother transition to your new home.

If you’re planning to move and wondering if portability is right for you, consult a mortgage broker to weigh your options and maximize your savings.

Need advice on porting your mortgage?

Contact me today to discuss how mortgage portability can save you money and help you transition smoothly to your next home!