A portable mortgage is a special feature that enables you to take your mortgage with you when you move. Of course, you can only do this if you sell your existing home and don’t keep it as a rental property.

With a portable mortgage the borrower will transfer the mortgage to the new property with the exact terms of the existing mortgage. Most mortgages in Canada have some type of portability feature.

If you are moving to a more expensive home, you may need to borrow additional funds. In this case, your existing term is transferred to the new mortgage with any additional funds priced at current interest rates. The interest rate on your new mortgage is a blend of the existing and new interest rates. This can be a real advantage if current interest rates are higher than your existing rate.

The other benefit to a portable mortgage is that you may not have to pay the prepayment penalty. Penalties typically apply when you break your existing mortgage before the end of the term.

If rates are lower, as they are today for many homeowners, it’s important to do the analysis. Sometimes it’s more lucrative to pay the penalty and have a lower rate, or to port.

To learn more on this, give me a call (403-804-7002) or drop me an email (susan@ashtonmortgages.ca)!