Porting your mortgage is one of those financial strategies that many Canadians hear about but do not fully understand until they are in the middle of a move. In simple terms, porting allows you to transfer your current mortgage agreement, including the interest rate, term, and lender, from the home you are selling to the home you are buying. For homeowners who have locked in a favourable interest rate, this option can be a real money saver.
Why Porting Matters in Today’s Market
Over the past few years, interest rates in Canada have gone through significant changes. Many borrowers are coming up for renewal and discovering that their payments will rise sharply compared to what they were paying before. If you are fortunate enough to have secured a lower interest rate in previous years, porting your mortgage gives you the chance to hold on to it even as market rates remain elevated.
This can be especially valuable in 2025 when a large number of Canadians are facing renewal and are preparing for higher costs. By porting, you may avoid paying a steep prepayment penalty that normally comes with breaking a mortgage term early.
How Porting Works
Although porting may sound straightforward, there are important steps involved. First, you must apply with the same lender that currently holds your mortgage. Even though you are transferring your agreement, the lender will still require you to requalify. That means they will review your income, credit history, and debt obligations as if you were applying for a brand new loan.
Second, timing is important. Lenders usually provide a limited window of time for you to complete the sale of your old property and the purchase of your new one. This window often ranges from one to three months. Aligning closing dates on both homes is critical to make sure the porting process goes smoothly.
Finally, the value of the new home will also play a role. If your new property costs more than your old one, you may need to increase the size of your mortgage. In this case, lenders often allow what is called a blend and extend arrangement. This means the existing balance stays at your old interest rate while the additional borrowing is placed at the current rate. If your new home costs less, the lender may require a penalty for the portion of the mortgage that is not transferred.
Advantages of Porting Your Mortgage
The most obvious advantage is the ability to keep a lower interest rate when current rates are higher. This alone can save you thousands of dollars over the life of your mortgage. Porting also helps you avoid paying a large prepayment penalty which can often amount to several months of interest or more. Another benefit is the simplicity of staying with your existing lender, which reduces the paperwork and can make the process less stressful.
Potential Drawbacks
Despite the advantages, porting is not always the best choice. You are tied to your current lender’s products and may miss out on a better deal from another financial institution. You also have to meet your lender’s current qualification standards which may be stricter than when you first obtained your mortgage. The strict timing between selling and buying can also create stress if your transactions do not line up. Finally, if today’s interest rates are lower than your existing one, porting could leave you paying more than necessary.
Current Trends in Canadian Real Estate
The Canadian housing market continues to be active with new housing starts showing growth in many regions. Buyers and sellers are closely watching the Bank of Canada for future rate changes. While there is some optimism that rates may begin to ease in 2026, many homeowners are still focused on finding ways to manage higher payments today. For those moving to a new property, porting their mortgage has become a popular way to maintain stability and protect against further financial strain.
Final Thoughts
Porting your mortgage can be an excellent strategy if you are moving and want to keep your existing interest rate. It helps avoid penalties and offers peace of mind during what can often be a stressful transition. However, it is not the right solution for everyone. Speaking with a knowledgeable mortgage broker is the best way to determine if porting makes sense for your financial situation. A broker can review your current mortgage, compare it to other available products, and help you decide whether to port, refinance, or take another approach.
Please contact us today if you are intersted in porting your mortgage!
647-580-7421