Moving? Porting Your Mortgage Might Save You the Penalty

Quick take

• Porting transfers your current mortgage terms to the new property instead of breaking them.
• If you need more money for the new home, lenders typically blend your old rate with the new borrowing rather than repricing everything.
• Ports run on strict clocks. The gap allowed between selling and buying is limited and varies by lender.
• You still requalify. A port is a new approval on the new property, not an automatic transfer.

"We are selling and buying in the same season. Do we have to break our mortgage and pay the penalty?"

Most people assume a move means breaking the mortgage, paying the penalty, and starting over. There is often a third option sitting in the contract nobody read. It is called a port.

Porting moves your existing mortgage, rate and all, from the house you are selling to the one you are buying. Done right, the penalty largely goes away.

How a port actually works

When you sell, the mortgage is paid out at closing and the penalty is charged. Port within the lender's window and that penalty gets refunded or waived as your existing terms re-attach to the new property. Same rate, same maturity date, new address.

Buying something more expensive is the normal case. Lenders handle it with a blend. Your existing balance keeps its rate, the new money is priced at current rates, and the two get averaged into one payment. You keep the value of your old rate on every dollar it was already covering.

The clocks and conditions that decide it

The window between closings is the make-or-break detail. Some lenders allow only a same-week handoff. Others allow a gap of a few months. If your sale closes long before your purchase, the port can die on timing alone. Ask this question first, before you finalize either closing date.

You also requalify like any other borrower, and the new property has to fit the lender's appetite. A port is a right to keep your terms. It is not a right to skip underwriting.

When porting is not the win

If today's pricing is better than your existing rate, breaking and starting fresh can beat porting, even after the penalty. The comparison is straightforward once you put the penalty quote and current offers side by side.

Downsizing can complicate a port too. Shrinking the mortgage by a lot may trigger a partial penalty anyway. The answer is always in the specific numbers, which is why you run them before you list, not after.

What to do this week

• Read your mortgage terms or ask your lender directly. Is it portable, and what is the allowed gap between closings?
• Get a written penalty quote at the same time, so both paths are priced.
• Tell whoever arranges your financing about your selling and buying dates before you lock either one.
• If your rate is below today's market, treat the port as valuable and plan the move around its deadlines.

Soft next step: If you want a plain read on your options, start with the numbers and decide from there. No pressure.

Related resources

• Rates and market outlook

Disclaimer: This article is general information for Ontario borrowers. It is not financial advice or a rate quote. Mortgage options depend on your file, property, timing, lender criteria, and market conditions at the time of application.