You are moving before the end of the term. If your agreement is portable, you carry your rate and term to the new house instead of paying a penalty.
It is never automatic: the lender reviews the file again, imposes a window between the sale and the purchase, and calculates a blended rate if the loan grows. We price porting against the penalty before you set your dates.
Check whether I can portI read the portability clause of your agreement, the window allowed, the minimum amount, then price three scenarios over the same period: porting with a blended rate, breaking and starting over at today’s rate while paying the penalty, or switching lenders. The right choice depends on the rate gap and the time left in the term, not on a principle.
Your current lender wants you to port, and it will not tell you when breaking would cost less. I run the numbers both ways. And if porting is the right choice, I fit the sale and purchase dates inside its window so the penalty does not land by accident.
Window allowed, minimum amount, re-review conditions. The agreement decides, not the advertising.
Three months of interest or the rate differential, for a specific date, with the lender’s statement.
Port, break and start over, switch lenders. Same balance, same horizon.
Sale and purchase inside the lender’s window, with a plan if either transaction slips.
Thirty to one hundred and twenty days between repayment and the new loan, depending on the agreement. A purchase that slips by a month can push you out of the window, and the penalty is charged as if you had broken the loan.
If the new house needs more money, the added portion takes today’s rate and the lender calculates an average. When rates have fallen, keeping the old rate on the old portion can cost more than refinancing everything.
In most files you pay nothing: I’m paid by the lender that secures your financing. What it costs, in detail
The penalty avoided and the rate gap decide the port.
No. The lender reviews your file and the new property again. If your income has dropped or the property does not pass, it can refuse, and the penalty then applies.
Depending on the agreement, 30 to 120 days. Beyond that, the loan is treated as repaid and the penalty is charged; some lenders refund it if you buy back within the window.
The difference is financed at today’s rate, and the lender combines the two into a blended rate. If today’s rate is lower than yours, porting is not necessarily worthwhile.
You repay part of the loan, and a penalty can apply on the portion repaid, unless it fits within your prepayment privileges.
It depends on the gap between your rate and today’s, the time left in the term, and the penalty. I price the three options over the same period; sometimes breaking and starting over costs less than keeping an old rate.
Major banks, credit unions, and specialized lenders each apply their own criteria, products, and terms. A logo does not mean that a mortgage will be offered or approved.
