You’re moving your sofa, bedroom furniture, dining set, and house plants to your new home – why not your mortgage?
Moving your mortgage from your existing home to your new home is called “porting” and it’s a smart step to take if your mortgage today is still a great fit for you. Here are some key questions about porting answered, to help you determine if you want to bring your mortgage with you when you move.
When should I consider porting my mortgage?
There are a number of situations when it’s typically beneficial to port your mortgage. For instance, porting is typically a good idea if:
Your existing mortgage rate is lower than current rates.
You’re moving before your mortgage maturity date.
You’re selling and buying a home at the same time.
Why would I port my mortgage instead of getting a new one?
As you’re moving to a new property, you may feel it’s easier to start fresh with a new mortgage. By keeping your existing mortgage, however, you avoid the pre-payment penalties that would apply if you’re breaking your mortgage before its maturity date. You may also have the advantage of keeping your low mortgage rate.
But if today’s rates are lower than the mortgage rate you have now, it may be worth breaking your existing mortgage to take advantage of the current rate environment. It’s a good idea to speak with your lender to determine if the lower interest rate will offset the penalties.
My new home requires a bigger or small mortgage – can I still port?
If your mortgage doesn’t fit perfectly with your new home, you can typically make some adjustments to is so that your mortgage still works for you.
For instance, increased ports are available when you want to keep your mortgage but need additional funding for your next home purchase. Decreased ports, meanwhile, let you take only the portion of your mortgage you need, when you don’t need as much.
How do I port my mortgage?
Not all mortgages are eligible for porting, and you may be required to submit another application to port your current mortgage, so be sure to speak to your broker or your lender to determine what options are available to you. If you’re an MCAP homeowner, check out MCAP’s Buying Your Next Home advice page for information and next steps.