Explaining Mortgage Porting and How It Works
Thursday, April 10, 2025
By David Elver for REALTOR.ca
So, you want to make a move but you’re not willing to give up that sub-3% interest rate? There’s something important you should know. Mortgage porting (also known as transferring your mortgage) has been growing in popularity in Canada. But what exactly is mortgage porting, and how do you know if it’s right for you?
We asked some experts for their perspectives.
What is mortgage porting?
How does mortgage porting work?
Can all mortgages be ported?
What’s the difference between porting vs. breaking a mortgage?
What are the pros and cons of mortgage porting?
Can you port a mortgage to a higher-value property?
When does porting a mortgage make sense?
Who should you call if you’re thinking about porting your mortgage?
What is mortgage porting?
“Porting a mortgage allows you to transfer your existing mortgage to a new property when selling your current home and purchasing another,” explains Alex Lavender, an Accredited Mortgage Professional (AMP) with the Clinton Wilkins Mortgage Team in Halifax, Nova Scotia, and the best-selling author of Mortgages for Millennials. “This means you retain the same interest rate, amortization period, and remaining term, while simply changing the property that secures the loan.”
According to Wendy Krukin, mortgage agent with Today’s Mortgage Choice in Toronto, Ontario, most homeowners who port their mortgages do so either to avoid the prepayment penalties that come with breaking a mortgage before its maturity date, or because their existing interest rate is lower than the current rates being offered.
“Mortgage porting can be a great option if you want to move, but keep your rate, especially if current interest rates are higher,” she notes. “Porting also lets you avoid penalties for breaking your mortgage contract early.”
How does mortgage porting work?
The first step in porting a mortgage is to talk to your lender or mortgage broker to find out if your mortgage is portable, and see what your lender’s porting policies are.
If your mortgage is portable, you can use a porting mortgage calculator (REALTOR.ca has a mortgage calculator tool you can easily use!) to see if porting makes financial sense for you. This depends on how much you still owe on your mortgage, and whether your existing rate is lower than current rates. If the numbers make sense, you can submit a request to your lender.
Because the ported mortgage will essentially become a new contract, your lender will likely need to reassess your income and credit, appraise the value of the home you want to buy, and re-qualify you all over again.
“This involves re-qualifying for the mortgage and ensuring that the new property meets the lender’s requirements,” Lavender says. “If approved, the existing mortgage is transferred to the new property, avoiding the need to break the mortgage.”
Can all mortgages be ported?
In most cases, you have to follow certain rules if you want to port your mortgage. For example, most lenders won’t let you port a restricted or variable-rate mortgage. So if you want to port a variable-rate mortgage, you’ll usually have to convert it to a fixed-rate mortgage first.
Because you’re transferring your mortgage from one property to another, you can only port a mortgage if you buy a new home within 30 to 120 days after selling your current property—depending on your lender. Plus, while many lenders allow mortgages porting, some don’t. So if you’re thinking about porting your mortgage, talk to your lender, broker, or REALTOR® for advice.
What’s the difference between porting vs. breaking a mortgage?
When you port a mortgage, you move your existing mortgage to your new property. Breaking a mortgage means completely ending your current mortgage contract early.
If you break your mortgage, you’ll be free to choose any lender and mortgage product you want for your new home, but you’ll have to pay the penalty for canceling early, and get re-qualified for a new mortgage at the current rates.
If you port your mortgage, on the other hand, you can keep your current interest rate, term, and other features of your existing mortgage, but you must keep your current lender, and adhere to whatever policies they have in place.
“When you port a mortgage, you avoid paying the penalty for breaking your mortgage, but you have to stay with your current lender,” Krukin explains. “When breaking a mortgage, you have to pay the prepayment penalty, but you can opt for current rates, a different term or amortization, and different lenders or products, so there’s more choice to change the details.”
What are the pros and cons of mortgage porting?
Depending on your circumstances, there are several pros and cons to porting your mortgage. The benefits of mortgage porting are that it might let you:
• save money by keeping your current interest rate;
• avoid the prepayment penalties; and
• extend any favourable terms from your existing mortgage.
The drawbacks, on the other hand, can include:
• limited flexibility on the types, term and amount of mortgages that qualify for porting;
• having to buy and sell quickly to fit within the 30- to 120-day porting window; and<
• not being able to explore different rates, products and offers from competing lenders.
While everyone’s situation is different, there are a few other things to keep in mind when deciding whether to port your mortgage.
• Breaking a mortgage could impact your credit rating, but mortgage porting usually has no effect on your credit.
• Some lenders have restrictions for porting a mortgage from one province to another, so check with your lender or broker first.
• Lastly, remember that in addition to your monthly payments, you’ll still need to come up with a down payment for your new home. If you need bridge financing to cover the down payment until the sale of your current home is complete, talk to your lender or broker as soon as possible.
Can you port a mortgage to a higher-value property?
If you want to port a mortgage to a cheaper home, you usually only have to pay a prepayment penalty on the portion of the loan you don’t need to take with you. But if you’re buying a more expensive house or need a larger mortgage, things can get a little more complicated.
Generally speaking, you can’t port more than the total amount of your current mortgage. So if you want to port a mortgage to a higher-value property than your current home, any new funds you need to borrow will likely be financed at the current rate of interest.
Luckily, most lenders will let you “blend and extend” your mortgage to take your existing loan with you, but top it off with additional financing at the current rate. For example, let’s say today’s interest rates are at 5%. You have $500,000 outstanding on your current mortgage at 3%, and you want to sell your home and buy a new home with a $600,000 mortgage.
If you break your mortgage, you’ll have to pay a prepayment penalty on the full $500,000, and negotiate a new mortgage for $600,000 at 5%. But if you port your existing $500,000 loan over to your new home at 3%, and then blend it with a top-up of another $100,000 at the current rate of 5%, you could end up saving a significant amount of money on your monthly payments.
When does porting a mortgage make sense?
For most homeowners, the question of whether to port or not boils down to the numbers.
“Porting is usually beneficial when your current rate is lower than market rates,” Lavender notes. “But if current interest rates are significantly lower than your existing rate, it may be worth evaluating whether breaking the mortgage and obtaining a new one would result in greater long-term savings.”
With so many different factors at play, crunching the numbers can be tricky. So don’t hesitate to ask your mortgage broker or lender to help you do the math, and weigh the pros and cons.
As Krukin notes: “Working with a mortgage professional is critical, because they can run the numbers and determine if it would be more favourable to port your mortgage or break your contract and get a new one, which can save you thousands of dollars in the process.”
Who should you call if you’re thinking about porting your mortgage?
You can only apply to port your mortgage once the offer on your new home is accepted, and you have a firm sale on your existing property. So, for most homeowners, it’s a good idea to reach out to your lender or broker no later than four weeks before your closing date, or as soon as you have a signed purchase agreement, to get the ball rolling.
Of course, anytime you need advice about any aspect of buying, selling or financing a home, you can also ask your REALTOR®! In addition to answering your questions, your REALTOR® can connect you to their network of qualified professionals, and help you get the expert advice you need to make an informed decision.
If you are thinking about a move in the next little while and you have questions about whether it will be a good idea to port your current mortgage from your existing home to your next one…
OR,
Your mortgage is coming up for renewal and you are wondering if you should go with a short-term or long-term mortgage…
OR,
You mortgage is coming up for renewal and you don’t know if it will be best to go with a fixed rate or variable rate…
OR,
You have questions about the current real estate market and would like to know if this is the right time for you yourself to buy and/or sell…
Please call me at 905-683-7800 and I’ll be more than happy to answer these and any other questions you may have.
Thanks for reading today’s BLOG!!!
Brian Kondo
Sales Representative / Team Leader
The Brian Kondo Real Estate Team
Re/Max Hallmark First Group Realty Ltd.
905-683-7800 office
905-426-7484 direct
brian@briankondo.com
www.BrianKondo.com
www.BrianKondoTeam.com
David Elver's article was initially published on Realtor.ca. You can find it by clicking here.
| REALTOR.ca is the most popular and most trusted real estate website in Canada. Owned and operated by the Canadian Real Estate Association (CREA), REALTOR.ca provides up-to-date and reliable information that makes finding your dream property easy and enjoyable. REALTOR.ca is popular with sellers, buyers, and renters and is accessible online and on mobile devices. |
|
David Elver |
About the Author David Elver is a Vancouver-based freelance writer, editor, and screenwriter who has worked with some of Canada’s leading public- and private-sector organizations. His work has appeared in newspapers, magazines, and online publications across Canada, and run the gamut from feature articles and social media success stories to best-selling coffee table books and two feature-length television movies. David enjoys kayaking, snowshoeing, and sunset strolls on the beach, although usually not at the same time. |
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