The Advantages of Porting Your Mortgage

“Mortgage porting" refers to the ability to transfer your existing mortgage to a new property without incurring prepayment penalties. This can be particularly beneficial for homeowners who are selling their current home and purchasing a new one.

Key Advantages of Mortgage Porting:

1. Avoid Prepayment Penalties:

- One of the significant advantages of mortgage portability is the ability to avoid prepayment penalties. When you sell your existing home and purchase a new one, porting allows you to seamlessly transfer your mortgage to the new property without incurring hefty fees for breaking your mortgage term.

2. Retain Favourable Interest Rates:

- If you have a favourable interest rate on your current mortgage, porting enables you to retain that rate for the remaining term of your mortgage. This can result in substantial savings, especially if market interest rates have increased since you secured your original mortgage.

3. Maintain Consistent Payments:

- Porting your mortgage allows you to maintain consistent monthly payments, which can be beneficial for budgeting and financial planning. This stability provides peace of mind during a time that is often characterized by various expenses related to moving.

4. Streamlined Process:

- The process of porting your mortgage is generally more straightforward than securing a new mortgage. Since you are working with your existing lender, they already have your financial information, making the approval process more efficient.

5. Flexibility in Timing:

- Porting provides flexibility in timing the purchase of your new home. You can secure the new property before selling your current one, allowing for a smoother transition without the pressure of coordinating closing dates.

Steps to Port Your Mortgage:

1. Contact Your Lender:

- Reach out to your current lender to inquire about the porting process. They will provide details on eligibility criteria, the documentation required, and any additional steps involved.

2. Assess New Property Financing:

- Work with your lender to determine the financing options for the new property. This may involve an assessment of your financial situation and an update on market conditions.

3. Coordinate Sale and Purchase Dates:

- Coordinate the sale of your existing property and the purchase of the new one to align closing dates as closely as possible. This helps facilitate the smooth transfer of your mortgage.

4. Complete the Porting Process:

- Once the details are finalized, complete the porting process with your lender. This involves signing the necessary documentation to transfer your mortgage to the new property.

Mortgage portability is a valuable option for Canadian homeowners looking to move while maintaining the benefits of their existing mortgage. By avoiding prepayment penalties, retaining favourable interest rates, and enjoying a streamlined process, porting provides flexibility and financial advantages during a significant life transition. If you're considering a move, explore the option of porting your mortgage with your lender to determine if it aligns with your homeownership goals and financial strategy.

For more information on porting your mortgage, contact My Mortgage Ladies.