Can You Transfer Your Mortgage to a New Property? Here’s What to Know

Buying a new home often raises questions about what happens to your existing mortgage. Can you transfer it to a new property?

The answer is yes—this process is called porting your mortgage. Understanding the steps and requirements can save you time, money, and stress during your move.

Here’s everything you need to know about transferring your mortgage to a new property in Canada.

What Is Mortgage Portability?

Mortgage portability allows you to transfer your current mortgage terms, such as the interest rate and remaining balance, to a new property. This can be a practical option if your existing mortgage has favorable terms that you want to retain.

Key Benefits of Porting a Mortgage:

Avoid breaking your mortgage contract and incurring penalties.
Retain a lower interest rate if rates have increased since your original loan.
Simplify the financial transition to your new home.

However, not all mortgages are portable, so it’s essential to check with your lender.

Steps to Transfer Your Mortgage to a New Property

Check Portability Terms in Your Mortgage Contract

Review your existing mortgage agreement or consult your lender to confirm if your mortgage is portable. Ask about any restrictions, such as timelines or additional fees.

Get Your New Property Approved

Your lender will need to assess the new property’s value and your financial situation. The approval process may include an appraisal and an updated credit check.

Cover the Difference in Costs

If your new property is more expensive than your current one, you may need to blend and extend your mortgage. This involves combining your existing rate with a new rate for the additional loan amount.

Complete the Transfer Process

Work with your lender to finalize the transfer. Ensure all paperwork is submitted on time to avoid delays.

What If Your Mortgage Isn’t Portable?

If your mortgage contract doesn’t allow portability, you have alternative options:

Break Your Mortgage: Pay the penalty to exit your current agreement and secure a new mortgage for the new property.
Switch Lenders: Compare offers from other lenders to find more favorable terms.

These options can be more costly, so it’s important to weigh the pros and cons with your broker.

Considerations When Transferring a Mortgage

Before proceeding, keep these factors in mind:

Timing: Most lenders require the new purchase to close within a specific timeframe to qualify for portability.
Fees: Additional costs, such as appraisal fees or legal expenses, may apply.
Eligibility: Changes in your financial situation, like reduced income or increased debt, could impact your eligibility.

Conclusion: Pradip Maheshvari Mortgages Makes Everything Easy!

At Pradip Maheshvari Mortgages, we specialize in simplifying complex mortgage processes. Whether you’re porting your current mortgage or exploring new options, we’re here to guide you every step of the way.

Get in Touch Now & Make the next move stress-free!

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