Canadians Are Embracing Mortgage Portability: Here's Why You Should Consider It
When life changes—whether it’s a new job, growing family, or a move to a different city—having flexibility in your mortgage can make all the difference. That’s where mortgage portability comes into play. As Canadian homeowners look for ways to adapt to an ever-changing housing market, mortgage portability is becoming a popular choice for many. It’s a valuable option that allows you to transfer your current mortgage to a new home, helping you save time, money, and potentially even stress.
At Rowe Mortgage Solutions, we’re here to help you understand how mortgage portability works and how it could benefit you, especially in today’s market. Let’s take a closer look at why so many Canadians are embracing this option.
What Is Mortgage Portability?
Mortgage portability refers to the ability to transfer your existing mortgage from your current property to a new one without having to pay penalties or break fees. Essentially, you’re keeping your current mortgage terms—such as interest rate, loan amount, and amortization period—when you move to a new home.
This can be an attractive option for homeowners who have favorable mortgage terms and don’t want to lose them when buying a new property. However, not all mortgages are portable, so it’s important to check the fine print of your loan agreement.
Why Should You Consider Mortgage Portability?
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Avoid Prepayment Penalties: One of the biggest benefits of mortgage portability is that it helps you avoid prepayment penalties. Typically, if you break a mortgage contract before the term is up, you’ll face fees that can add thousands of dollars to your overall cost. By transferring your mortgage to your new home, you sidestep these expensive fees.
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Keep Your Low Interest Rate: If you secured a great interest rate when you originally took out your mortgage, portability allows you to hang onto it, even if rates have increased since then. This can be a significant savings over the life of your loan, especially if interest rates are expected to rise in the future.
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Flexibility During a Life Transition: Whether you’re upgrading to a larger home, downsizing, or relocating to a new area, portability allows you to stay with your current lender and keep the same mortgage conditions, saving you time and effort.
For those looking to take advantage of this option, it’s important to work with a trusted mortgage professional. Rowe Mortgage Solutions can help you navigate mortgage portability and determine if it's the right choice for you.
How Does Mortgage Portability Work?
While mortgage portability can be a great solution, it’s not as simple as just moving your mortgage from one property to another. Here's how it typically works:
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Review Your Mortgage Terms: The first step is to confirm that your mortgage is portable. Not all lenders offer this feature, so you’ll need to check your agreement or talk to your lender to find out.
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Find Your New Home: Once you know that portability is an option, you can start looking for your new home. When you find one, you’ll need to inform your lender about your intention to transfer your mortgage.
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Application Process: Although you don’t need to qualify for a new mortgage in the traditional sense, the lender will still assess your income level and the value of your new home to ensure it meets their criteria. This could involve an appraisal and other checks.
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Transfer Your Mortgage: If everything checks out, your mortgage will be transferred to your new home, keeping the same interest rate and terms. If your new home is more expensive than your old one, you may need to top up your mortgage to cover the difference.
When Should You Consider Mortgage Portability?
Mortgage portability is a great option in the right circumstances, but it’s not always the best choice for everyone. Here are some scenarios where portability may make sense:
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When Interest Rates Have Risen: If interest rates have increased since you took out your original mortgage, portability can allow you to avoid higher rates when moving to a new home.
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If Your Current Mortgage Has Favorable Terms: If you have a fixed-rate mortgage with terms you’re happy with, mortgage portability ensures you don’t lose those terms when upgrading or downsizing your home.
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When You’re Moving to a New Location: If you're relocating to a new city or area, portability can make the transition easier by avoiding the need to apply for a new mortgage, although you will still need to provide updated income documentation.
In some cases, portability may not be the best option. If your current mortgage is not portable or the terms have changed drastically, it may be worth considering other options such as refinancing or taking out a new loan.
Want to know if mortgage portability is right for you? Book a consultation with Cody Rowe to discuss your options in more detail.
At Rowe Mortgage Solutions, we proudly serve homebuyers and homeowners throughout British Columbia, including Victoria, Vancouver, and surrounding areas. Whether you’re considering mortgage portability or exploring other financing options, we’re here to provide you with expert guidance every step of the way.
If you're thinking about moving and want to explore how mortgage portability can benefit you, Contact us today to learn more. You can also reach out directly to Cody at codyrowe@dominionlending.ca to ask any questions or schedule a consultation.
