Mortgages come with many features, some of which could be unknown to you. The one that I see many people taking advantage of right now is the portability feature offered on some mortgage products.
A portable mortgage can be transferred (“ported”) from one property to another. If the mortgage amount remains the same, the interest rate will also remain the same.
If the mortgage amount is increased, the existing interest rate will be “blended” with the current (usually not discounted) rate for the remainder of the term. Having a mortgage broker calculate if you will save money by porting your mortgage or taking a new term is important.
If the mortgage amount is being decreased, you may pay a portion of a penalty. It will depend on the amount the mortgage is being reduced.
There’s a possibility you won’t be able to use the portability feature at all. Some lenders allow mortgage porting, while others do not. Not all mortgage products are portable. For example, most variable-rate mortgages can’t be ported. A mortgage broker will be able to tell you which products are portable.
The amount of time you have to complete the port, usually between 30 and 120 days, also varies among lenders. Some will allow just 30 days, which may be tight in some circumstances. But 120 days is usually enough time for you to complete the sale of your old property and purchase a new home.
If you’re looking to buy a new house, make sure you do your research and decide if a portable mortgage is an important feature for you.