Porting your Mortgage, or a Portable Mortgage, is taking your existing Mortgage and moving with you to your new property instead of breaking your mortgage. Most lenders have a portability feature on their mortgages, so if you are a first time homebuyer, you may want to check with your Mortgage Broker to explain all the advantages and disadvantages of a Portable Mortgage.
Porting your mortgage has a number of advantages:
• If you currently have a low mortgage rate and below current rate, you can save thousands on interest.
• Avoid Prepayment Charges if you have a closed mortgage
• Keep same Mortgage payments and keep any incentives you had at time of signing.
• Can still change the mortgage amount even if it changes.
Not only can you Port Your Mortgage and keep the same interest rates, but you can also Port Your Mortgage Default Insurance.
Always a But…
What if you can get a better rate by breaking your mortgage or you want to change lenders? Here would be the advantages of breaking a mortgage (some may or may not be applicable, depends on your current mortgage type)
• Change Payment frequency so you can pay off your mortgage faster
• Not satisfied with current lender
• Consolidate other debts that have higher interest rates
• You may get a special or discounted rate (take into consideration any offer you received from present lender as you may need to pay that back if you break your contract with them)
Hold on… there are still fees to take into consideration:
1 Set-up fees with the new lender (Fees to discharge the previous mortgage and register new mortgage)
2. Transfer or Assignment Fee
3. Appraisal fee to confirm the value of your property (if necessary)
4. Other administration fees
5. New Mortgage default insurance if you are increasing the loan amount or extending the amortization period.
6. Lawyer Fees
7. Pay back the “Cash Back” you received.
8. And last. but one that can make or “BREAK” your decision, you will incur Prepayment Charges (Read More).
We hope you found our Blog Article “If You Are Selling Your Home Have You Considered Porting Your Mortgage” helpful and something to ponder, but check with your Mortgage Broker for more details.
Be sure to check back again next Week for more tips and info on Mortgages.