🔍 Mortgage Portability in Canada: What It Really Means and When to Use It
When you're a homeowner in Canada thinking about moving to a new property, one of the most important financial questions you'll face is: What happens to my existing mortgage? This is where mortgage portability comes into play. It's a feature that can potentially save you thousands of dollars — if you know how and when to use it.
What Is Mortgage Portability?
In simple terms, mortgage portability allows you to transfer your existing mortgage — including its current interest rate, terms, and remaining balance — to a new property when you sell your current home.
Instead of breaking your mortgage (and likely paying a prepayment penalty), portability lets you keep your loan going, just on a new piece of real estate.
Why Would You Want to Port a Mortgage?
Here are a few key reasons:
✅ Avoid prepayment penalties – These can be hefty, especially if you're locked into a fixed-rate mortgage.
✅ Keep a favourable interest rate – If you locked in a low rate before a market hike, porting lets you keep it.
✅ Simplify financing – You’re already approved and know the terms; it’s a cleaner process than starting over.
How It Works
Here’s a general idea of how mortgage portability works in Canada:
You sell your current home.
You buy a new home, usually within 30–120 days, depending on your lender’s policy.
You transfer your existing mortgage to the new home.
If the new home costs more and you need additional funds, you may need a "blend and extend" — this combines your current rate with the lender’s current rate for the extra amount.
When Does It Make Sense to Use It?
While mortgage portability sounds like a win, it’s not always the best move. Here’s when it does make sense:
📉 You have a low interest rate and rates have since gone up.
💰 You’re still in the middle of your mortgage term and would otherwise face high penalties.
🏡 You’re buying a home of similar or lesser value (easier to match financing terms).
🕒 Your new home’s closing date is within your lender’s portability window.
When It Doesn’t Make Sense
There are scenarios where porting isn’t ideal:
🔒 Your lender has strict conditions that make portability difficult or expensive.
⌛ You can’t align the closing dates of the sale and purchase within the allowable timeframe.
🏦 You're moving to a much more expensive home, and the "blended rate" offered isn’t competitive.
What Should You Ask Your Lender?
Before banking on portability, get clear answers to these:
❓ Is my mortgage portable?
❓ What is the time frame allowed for transferring?
❓ Are there any fees involved?
❓ Will the new home qualify under the current mortgage terms?
❓ What happens if I need a larger mortgage?
