Are you in your forever home? Do you plan to move sometime soon? Regardless of which life stage you’re in, as a homeowner, the option to port or move your mortgage is a beneficial feature to have. Why? We’ll break it down for you.
What is porting your mortgage?
Porting a mortgage means taking your existing mortgage—along with its current rate and terms—from your present home to your new home. It allows you to transfer the existing interest rate and terms in your current mortgage to when you move houses.
You can only port a mortgage if you’re purchasing a new property and selling your existing one at the same time.
Not all mortgages are portable. It’ll all depend on what was in the loan papers when you signed them. However, even if you don’t think the option was on the table when you signed your existing mortgage, it doesn’t hurt to double-check with your lender.
How can you port a mortgage?
The first step would be to talk to the experts. Discuss this with a lender, they’ll help crunch the numbers to find the best option for you. They’ll be able to guide you through the process. Keep in mind that you can only port a mortgage when you’re buying a new home while selling your current house.
What are the benefits?
Moving or porting your existing mortgage could save you money on the interest costs. It could also save you money on all the fees that come with breaking your mortgage.
Avoid extra charges
You may be able to avoid prepayment charges that banks apply if you broke your mortgage early while moving homes. Depending on how much time you have left on your term, these savings could be significant. Even if you need a larger mortgage for your new home, you may be able to port your existing mortgage and blend that mortgage term with new funds at current interest rates.
When would you want to port?
There are two instances when porting your mortgage could be beneficial to you:
1. You’re happy with your interest rate
If your existing rate is lower than the current rates in the market, why not just keep it?
2. It’s going to cost you
Are you going to get charged for breaking your mortgage term early? Porting might be a cheaper option if you compare it to the penalties that come with breaking a mortgage.
Give us a shout. We can help you explore all your options when you’re moving or thinking about moving. Our Relationship Managers can help you create a personalized financial plan to help you reach your goals.