Porting Mortgages and breaking mortgages

Yes, it’s possible to port a mortgage or break your existing mortgage, but the process depends on your specific situation and the terms of your mortgage agreement.

 Mortgage porting allows eligible homeowners to transfer their existing mortgage to a new property, maintaining the same interest rate, term, and lender., without having to pay penalties. This can be an ideal solution if you’re moving and want to keep your current mortgage terms, such as your interest rate or the remaining term. However, porting isn't always guaranteed—it depends on whether the new property meets the lender’s criteria, if the property is less expensive, your lender might require a reduction in your mortgage balance and if there’s any change in the loan amount or terms. Some conditions may apply.

 If your new home is more expensive, you may need to apply for a blended mortgage, where the additional funds are combined with your existing mortgage at a new, blended interest rate. We’ll help you evaluate whether porting or refinancing offers the best long-term value. 

If you’re planning to break your mortgage contract—whether you're selling your home, refinancing to access equity, or switching to a new mortgage product—it’s crucial to understand the potential mortgage penalties.

Depending on the terms of your agreement and the current mortgage interest rates, these fees can be significant. Lenders typically charge one of two types of early termination penalties:

• Three Months’ Interest:
  Common for variable-rate mortgages, this fee equals three months of interest at your current rate.
   
• Interest Rate Differential (IRD):
  For fixed-rate mortgages, the IRD is calculated based on the difference between your existing rate and the lender’s current rate for a comparable term. This is often the more expensive penalty, especially in a declining interest rate environment.

It’s important to consider these costs before deciding to port or break your existing mortgage, especially if you’re moving to a new home or switching lenders.

• If you’re thinking about porting or breaking your mortgage, or refinance your mortgage, we recommend discussing your options with us at Serenity Mortgages. We can help you determine whether porting is the right choice, calculate potential penalties for breaking your mortgage, and explore how you can minimize costs while transitioning to your next property.
   

This should give a clear explanation of the difference between porting and breaking a mortgage and what clients need to consider. Contact Us if you'd like to refine it further!