Porting and breaking mortgages

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

Porting allows you to transfer your existing mortgage to a new property 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, and if there’s any change in the loan amount or terms. Some conditions may apply, such as:

• The new property must meet your lender’s requirements.
   
• If the new property costs more, you may need to increase your mortgage or apply for additional financing.
   
• If the property is less expensive, your lender might require a reduction in your mortgage balance.

If you decide to break your mortgage early—whether due to selling your home, refinancing, or choosing a new mortgage product—you may be subject to penalties. These penalties can be substantial, depending on the terms of your mortgage and the current interest rates. Typically, the penalty is either:

• Three months' interest (if you have a fixed-rate mortgage)
   
• The interest rate differential (IRD), which is the difference between your current rate and the lender’s current rate for the remaining term of the mortgage.
   

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

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

• If you’re thinking about porting or breaking 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!