If you’re thinking about buying a new home but already have a mortgage with a great interest rate, you may have heard the term “porting your mortgage.” It’s one of the most overlooked options available to homeowners, yet it can potentially save you thousands of dollars.

Here’s what you need to know.

What Does It Mean to Port a Mortgage?

Porting a mortgage means transferring your existing mortgage—including your current interest rate and remaining term—from your current home to a new property.

Instead of breaking your mortgage and starting over, you may be able to take your existing mortgage with you.

For homeowners with rates that are lower than today’s market rates, this can be a significant financial advantage.

Why Would You Port Your Mortgage?

There are several reasons why porting may make sense:

Keep Your Existing Interest Rate

If your current mortgage rate is lower than what’s available today, porting allows you to continue benefiting from that lower rate for the remainder of your mortgage term.

Avoid Prepayment Penalties

Breaking a mortgage before the end of the term can result in substantial penalties—sometimes thousands of dollars. Porting your mortgage may allow you to avoid or significantly reduce these costs.

Simplify Your Move

Keeping the same mortgage can make your financing more straightforward, especially if you’re happy with your current lender.

What Happens If You Need More Money?

Many homeowners purchase a more expensive home than the one they’re selling.

In this case, your lender may allow you to blend and extend your mortgage.

This means:

• Your existing mortgage balance keeps its current rate.
• The additional funds are borrowed at today’s interest rate.
• The lender blends the two rates together to create one new mortgage payment.

Every lender calculates blended rates differently, so it’s important to compare your options.

What If You’re Buying a Less Expensive Home?

If your new mortgage amount is smaller than your current mortgage balance, porting may still be possible. However, depending on your lender, you may need to pay a penalty on the portion of the mortgage that isn’t being transferred.

This is why it’s important to review the numbers before making a decision.

Not Every Mortgage Can Be Ported

Although many mortgages are portable, not all of them are.

Some common conditions include:

• You must qualify for the new mortgage based on your current income, debt, and credit.
• The new property must meet the lender’s guidelines.
• There are usually timelines that require the sale of your existing home and purchase of your new home to occur within a specified period.
• Certain mortgage products may not be portable.

Each lender has its own rules, so it’s worth checking before you list your home.

Should You Port or Start Fresh?

Porting isn’t always the best option.

Sometimes current mortgage products offer features or rates that make starting with a new mortgage the better financial choice—even if it means paying a penalty.

That’s why it’s important to compare:

• The cost of breaking your current mortgage.
• The savings from keeping your existing rate.
• Available rates from other lenders.
• Your long-term financial goals.

A complete mortgage analysis can help determine which option saves you the most money.

The Bottom Line

Every homeowner’s situation is different, and there’s no one-size-fits-all answer.

If you’re planning to move, don’t assume you need to break your mortgage. Porting may allow you to keep your existing rate, avoid costly penalties, and make your transition much more affordable.

Before you buy your next home, let’s review your current mortgage and explore all of your options. A little planning today could save you thousands tomorrow.

Thinking about moving? Contact White House Mortgages before you list your home. We’ll review your existing mortgage, explain whether porting is available, compare all of your options, and help you make the decision that’s best for your financial future.

If you’re thinking about buying a new home but already have a mortgage with a great interest rate, you may have heard the term “porting your mortgage.” It’s one of the most overlooked options available to homeowners, yet it can potentially save you thousands of dollars.

Here’s what you need to know.

What Does It Mean to Port a Mortgage?

Porting a mortgage means transferring your existing mortgage—including your current interest rate and remaining term—from your current home to a new property.

Instead of breaking your mortgage and starting over, you may be able to take your existing mortgage with you.

For homeowners with rates that are lower than today’s market rates, this can be a significant financial advantage.

Why Would You Port Your Mortgage?

There are several reasons why porting may make sense:

Keep Your Existing Interest Rate

If your current mortgage rate is lower than what’s available today, porting allows you to continue benefiting from that lower rate for the remainder of your mortgage term.

Avoid Prepayment Penalties

Breaking a mortgage before the end of the term can result in substantial penalties—sometimes thousands of dollars. Porting your mortgage may allow you to avoid or significantly reduce these costs.

Simplify Your Move

Keeping the same mortgage can make your financing more straightforward, especially if you’re happy with your current lender.

What Happens If You Need More Money?

Many homeowners purchase a more expensive home than the one they’re selling.

In this case, your lender may allow you to blend and extend your mortgage.

This means:

• Your existing mortgage balance keeps its current rate.
• The additional funds are borrowed at today’s interest rate.
• The lender blends the two rates together to create one new mortgage payment.

Every lender calculates blended rates differently, so it’s important to compare your options.

What If You’re Buying a Less Expensive Home?

If your new mortgage amount is smaller than your current mortgage balance, porting may still be possible. However, depending on your lender, you may need to pay a penalty on the portion of the mortgage that isn’t being transferred.

This is why it’s important to review the numbers before making a decision.

Not Every Mortgage Can Be Ported

Although many mortgages are portable, not all of them are.

Some common conditions include:

• You must qualify for the new mortgage based on your current income, debt, and credit.
• The new property must meet the lender’s guidelines.
• There are usually timelines that require the sale of your existing home and purchase of your new home to occur within a specified period.
• Certain mortgage products may not be portable.

Each lender has its own rules, so it’s worth checking before you list your home.

Should You Port or Start Fresh?

Porting isn’t always the best option.

Sometimes current mortgage products offer features or rates that make starting with a new mortgage the better financial choice—even if it means paying a penalty.

That’s why it’s important to compare:

• The cost of breaking your current mortgage.
• The savings from keeping your existing rate.
• Available rates from other lenders.
• Your long-term financial goals.

A complete mortgage analysis can help determine which option saves you the most money.

The Bottom Line

Every homeowner’s situation is different, and there’s no one-size-fits-all answer.

If you’re planning to move, don’t assume you need to break your mortgage. Porting may allow you to keep your existing rate, avoid costly penalties, and make your transition much more affordable.

Before you buy your next home, let’s review your current mortgage and explore all of your options. A little planning today could save you thousands tomorrow.

Thinking about moving? Contact White House Mortgages before you list your home. We’ll review your existing mortgage, explain whether porting is available, compare all of your options, and help you make the decision that’s best for your financial future.

Just announced!

OTTAWA — The Bank of Canada kept its key interest rate target on hold Wednesday, but hinted that rate hikes could be coming as it noted the Canadian economy was a little stronger than expected in the first quarter.

The central bank held steady its target for the overnight rate — a key financial benchmark that influences the prime lending rates at the country’s big banks — at 1.25 per cent.

A statement released with the decision noted that exports were more robust than forecast as data on imports of machinery and equipment suggest continued recovery in investment, but also pointed to softer real estate activity into the second quarter as the market “continues to adjust to new mortgage guidelines and higher borrowing rates.”

“Going forward, solid labour income growth supports the expectation that housing activity will pick up and consumption will continue to contribute importantly to growth in 2018,” it said.

The central bank also said global economic activity remains broadly on track, but added that ongoing uncertainty about trade policies is dampening global business investment and stresses are developing in some emerging market economies.

It noted that recent developments have reinforced its view that higher rates will be warranted to keep inflation near its target, but added that it will take a gradual approach and be guided by the economic data.

“In particular, the bank will continue to assess the economy’s sensitivity to interest rate movements and the evolution of economic capacity,” it said.

Economists had predicted the Bank of Canada would keep its key rate on hold Wednesday, but many have suggested the rate may be headed higher later this year.

The central bank’s statement had “a hawkish tone, suggesting the next rate hike is not far off,” said TD Bank senior economist Brian DePratto.

“All told, the positives seem to outweigh the negatives,” DePratto wrote in a note to clients.

“Gone was the reference to ‘caution’ that typified the last few statements. Today’s statement instead chose the term ‘gradual’ to describe the approach to policy adjustments. Importantly, interest rate sensitivity and the evolution of economic capacity remained areas of particular focus.”

The central bank’s decision to keep its trend-setting rate on hold came as inflation sits above the two per cent midpoint of its target range of one to three per cent and core inflation has crept past the two per cent mark for the first time since 2012.

It noted that inflation will likely be a bit higher in the near term than was forecast in its April monetary policy report due to recent increases in gasoline prices, but that it will look through the transitory impact of the fluctuations at the pump.

The central bank has raised its key rate three times since last summer, increases that have prompted the big Canadian banks to raise their prime rates which are used to set the rates charged for variable-rate mortgages and other variable-rate loans.

Its next scheduled interest rate decision is set for July 11 when it will also update its outlook for the economy and inflation in its monetary policy report.

Craig Wong, The Canadian Press

Since an increasing number of lenders are moving towards collateral charge mortgages these days, it has never been more important to understand the differences between a collateral and standard charge mortgage.

The primary difference is that a collateral charge mortgage registers the mortgage for more money than you require at closing. For instance, up to 125% of the value of the home at closing with TD Canada Trust or 100% through various credit unions, instead of the amount you need to close your transaction (as is the case with a standard charge mortgage).

The major downside to a collateral mortgage becomes evident at your mortgage renewal date. For borrowers who want to keep their options open at maturity and have negotiating power with their lender, this isn’t the best product feature because collateral charge mortgages are difficult to transfer from one lender to another.

In other words, if you want to change lenders in order to seek a better product or rate in the future, you have to start from the beginning and pay new legal fees, which range from $500 to $1,000. With a standard charge mortgage, in most cases, the new lender will cover the charges under a “straight switch” in order to earn your business.

In addition, with a collateral charge, it could be difficult to obtain a second mortgage or a home equity line of credit (HELOC) unless your home significantly appreciates in value.

Lenders offering collateral charge mortgages promote the benefit that it makes it easier and more cost effective to tap into your equity for such things as debt consolidation, renovations or property investment. There’s no need to visit a lawyer and pay legal fees – the money is available as your mortgage is paid down. Yet, if you read the fine print you may still have to re-qualify in order to access the additional funds.

A standard charge mortgage gives you the ability to move to another lender at renewal should you want to without incurring legal fees, and many borrowers find it more beneficial to keep their options open. If you need to borrow more with a standard charge mortgage you have the option of a second mortgage or a HELOC, which also enables you to take money out as your mortgage is paid down.

Navigating through the mortgage process alone can be tricky. At Dominion Lending Centres White House Mortgages we have access to multiple lenders and we can help ensure you receive the product and rate for your specific needs.