What Is Mortgage Porting?
Mortgage porting lets you transfer your current mortgage to a new property, keeping:
- Your existing interest rate
- Your remaining term
- Your prepayment privileges
This is valuable when you have a below-market interest rate and want to move without paying penalties.
When Does Porting Make Sense?
Port Your Mortgage If:
| Situation | Benefit |
|---|---|
| Your rate is below current rates | Keep the lower rate |
| You’re mid-term | Avoid prepayment penalty |
| New home is similar price | Simple port |
| Close dates align | 30-120 day window |
Don’t Port If:
| Situation | Better Option |
|---|---|
| Your rate is higher than current rates | Break and refinance |
| Variable rate mortgage | Usually can’t port |
| Very early in term | Penalty may be small |
| New home much more expensive | Blend-and-extend may be costly |
| Close dates don’t align | Bridge financing adds cost |
Porting vs Breaking: Cost Comparison
Example: $400,000 Mortgage, 3.5 years Remaining, 4.5% Rate
Scenario A: Current Rates Are 6.5%
| Option | Cost |
|---|---|
| Port mortgage | $0 + legal fees ($1,500) |
| Break mortgage | $10,000-15,000 penalty |
| Best choice | Port |
Scenario B: Current Rates Are 4.0%
| Option | Cost |
|---|---|
| Port mortgage | Keep 4.5% rate for 3.5 years |
| Break mortgage | $10,000 penalty but get 4.0% |
| Best choice | Compare total cost |
How to Port Your Mortgage
Step 1: Check Portability
| What to Check | Where to Find |
|---|---|
| Is mortgage portable? | Mortgage agreement or lender |
| Porting window | Usually 30-120 days |
| Terms and conditions | Fine print in agreement |
Step 2: Qualify for New Property
Even when porting, you must:
- Qualify under current mortgage rules
- Pass stress test at new property value
- Provide income verification
- Get property appraised
Step 3: Timing
| Event | Timeline |
|---|---|
| Sell current home | Close must align |
| Buy new home | Within porting window |
| Port request | Apply before closing |
| Typical window | 30-120 days |
Some lenders offer longer windows (up to 6 months) but may have conditions.
Step 4: Complete the Port
| Action | Details |
|---|---|
| Apply to port | Through your lender |
| New property appraisal | Required by lender |
| Legal work | Discharge old, register new |
| Close both transactions | May need bridge financing |
Blend-and-Extend: Buying More Expensive Home
If your new home costs more than your current mortgage:
How Blend-and-Extend Works
- Port existing mortgage ($400,000 at 4.5%)
- Add new money for difference ($100,000 at 6.5%)
- Blend into single rate (~5.0%)
- Extend term (often reset to 5 years)
Blended Rate Calculation
| Component | Amount | Rate | Weighted |
|---|---|---|---|
| Ported mortgage | $400,000 | 4.5% | 80% of total |
| New funds | $100,000 | 6.5% | 20% of total |
| Blended rate | $500,000 | 4.9% | — |
Formula: (Old Amount × Old Rate + New Amount × New Rate) ÷ Total Amount
Example Calculation
| Ported Amount | Ported Rate | New Amount | New Rate | Blended Rate |
|---|---|---|---|---|
| $300,000 | 4.0% | $200,000 | 6.0% | 4.8% |
| $400,000 | 4.5% | $100,000 | 6.5% | 4.9% |
| $350,000 | 3.5% | $150,000 | 6.0% | 4.25% |
Bridge Financing
If your new home closes before your old home sells:
| Feature | Details |
|---|---|
| Purpose | Short-term loan to cover gap |
| Typical term | 30-120 days |
| Interest rate | Prime + 2-3% (higher than mortgage) |
| Cost | $1,000-3,000 for typical bridge |
When You Need Bridge Financing
| Scenario | Bridge Needed? |
|---|---|
| Sell first, buy second | No |
| Buy first, sell second | Yes |
| Same-day close | Maybe (safety net) |
Porting Requirements by Lender
| Lender Type | Portability | Window |
|---|---|---|
| Big 5 banks | Usually portable | 90-120 days |
| Credit unions | Varies | Check terms |
| Monoline lenders | Often portable | 30-90 days |
| Private lenders | Rarely | — |
Questions to Ask Your Lender
- Is my mortgage portable?
- What’s the porting window?
- Can I blend-and-extend?
- What rate for new money?
- What fees apply?
- Do I need to re-qualify?
Porting Costs
| Cost | Typical Amount |
|---|---|
| Appraisal | $300-500 |
| Legal fees | $1,000-1,500 |
| Title insurance | $200-400 |
| Registration fees | $100-200 |
| Bridge financing (if needed) | $1,000-3,000 |
| Total | $1,600-5,600 |
Compare to prepayment penalty which can be $10,000-30,000+.
Pros and Cons of Porting
Advantages
| Pro | Details |
|---|---|
| Keep low rate | Valuable in rising rate environment |
| Avoid penalty | Prepayment penalties can be significant |
| Maintain term | Keep existing repayment schedule |
| Simple process | If buying similar-priced home |
Disadvantages
| Con | Details |
|---|---|
| Must qualify | Current income/debt rules apply |
| Strict timing | Dates must align |
| Blend-and-extend | May not be best rate for new money |
| Stuck with lender | Can’t shop for better deal |
Alternative: Break and Refinance
Sometimes breaking is better:
| Scenario | Calculation |
|---|---|
| Your rate: 5.5% | — |
| Current rates: 4.5% | — |
| Remaining term: 4 years | — |
| Penalty: $8,000 | — |
| Monthly savings: $250 | — |
| Breakeven: 32 months | Penalty ÷ monthly savings |
| Recommendation | Break and refinance |
When to Break
- Current rates significantly lower
- Penalty is reasonable (IRD < 3 months’ interest)
- Remaining term is long enough to recoup penalty
- Need to access equity anyway
Checklist: Porting Your Mortgage
Before Selling
| Task | Status |
|---|---|
| Confirm portability with lender | ☐ |
| Understand porting window | ☐ |
| Get current rate comparison | ☐ |
| Calculate break penalty (for comparison) | ☐ |
| Pre-approval for new amount if buying up | ☐ |
During Sale Process
| Task | Status |
|---|---|
| Coordinate closing dates | ☐ |
| Apply for port with lender | ☐ |
| Arrange bridge financing if needed | ☐ |
| Hire real estate lawyer | ☐ |
| Schedule appraisal for new property | ☐ |
At Closing
| Task | Status |
|---|---|
| Sign mortgage documents | ☐ |
| Transfer keys | ☐ |
| Confirm port completion | ☐ |
| Set up new payment schedule | ☐ |