If you own and are moving, you may wonder what happens to your mortgage. Depending on your mortgage, you may be able to transfer it.
The process of taking your current mortgage and transferring it to a new property is referred to as "porting" your mortgage.
Your current interest rate and the benefits you receive for prepayment will remain unchanged, along with the rest of the terms and conditions of your mortgage.
This can benefit anyone buying a new property and selling their old one, especially if interest rates are higher than when they negotiated their existing mortgage.
If you end up purchasing a home that necessitates a larger mortgage than you currently have, your lender may allow you to blend and extend a ported mortgage.
Because you are not defaulting on your initial mortgage, you will not be required to pay any penalties.
However, if you are moving to a home with a lower value than your current mortgage, a prepayment fee on the ported mortgage may apply.
It depends on your mortgage terms. Not all lenders allow mortgage portability. Porting is only possible when buying a new home and selling an old one.
In general, fixed-rate mortgages can be ported, whereas most variable-rate mortgages cannot be ported unless you first convert to a fixed-rate mortgage.
If you're moving to a larger home and need a larger mortgage, your lender will need to requalify you based on your current income, assets, and debt load.
If you meet their criteria, transferring should be easy. If they're worried about your debt or new home's value, they may not lend you the full amount.