Taking your mortgage with you when you move

If you sell and buy while partway through a mortgage term, you have two options. Break the mortgage and pay the penalty, or take it with you.

Taking it with you is called porting, and when it works it saves the entire penalty. It is also surrounded by conditions that nobody mentions until you need them.

What porting actually is

Your mortgage stays alive. The same rate, the same maturity date, the same balance. The lender simply moves the security from the old property to the new one.

You are not getting a new mortgage. You are relocating an existing one, which is why the penalty does not apply.

The deadline that catches people

Porting has a time limit, and it is the single most common reason a port fails.

Lenders allow a window between the sale of the old property and the purchase of the new one. That window varies a great deal, from around thirty days at the tighter end to a hundred and twenty at the more generous. Miss it and the mortgage is considered discharged, and the penalty applies as normal.

Find out your lender’s window before you list, not after. It can genuinely change how you sequence the sale and the purchase.

Some lenders will only port if the two transactions close on the same day, which is the most restrictive version and worth knowing in advance.

You have to qualify again

This surprises people who assume porting is administrative. It is not.

The lender re-underwrites you: current income, current credit, current debts, under the rules in force now rather than when you first borrowed. They also assess the new property.

So porting can fail even when nothing about the mortgage changes, if your circumstances did. Someone who has become self-employed since they first borrowed, or taken on a car loan, or had a credit problem, may find the port declined. The property can cause it too, if the new one is a type the lender will not finance.

If anything material has changed, raise it early. There is usually a route through, and almost never one discovered in the final fortnight.

When the new home costs more

Usually it does, and your existing mortgage does not cover it. The extra is handled by blending.

The lender lends you the additional amount at current rates and blends it with your existing rate, weighted by the two amounts. The result is one mortgage at one rate somewhere between them.

Two variations exist. Blend and extend resets the term to a new full term. Blend to term keeps your existing maturity date and prices the new money for the remaining period only.

Neither is automatically better. Blend and extend gives you a longer commitment at a blended rate. Blend to term keeps your renewal date, which matters if you would rather revisit the whole thing sooner.

The thing to check is what rate the lender is offering on the new portion. You have limited leverage in a blend, because you are not really shopping, and lenders know it. Compare the blended result against simply breaking, paying the penalty, and taking a fresh mortgage elsewhere. Sometimes breaking genuinely wins, particularly when the penalty is small because the term is nearly up.

When the new home costs less

You port the amount you need and pay down the difference. The portion you are paying off is usually treated as a prepayment, and if it exceeds your annual privileges you may face a partial penalty on the excess.

Ask how that will be calculated before you commit to a smaller property.

When porting is not the right call

• Your rate is not worth keeping. If rates have fallen well below yours, the saving from a new mortgage may exceed the penalty. Run the arithmetic rather than assuming the port is free money.
• The penalty is small anyway. Late in a term, or on a variable rate where the penalty is typically three months of interest, breaking can cost little enough that the flexibility is worth more.
• You want different terms. Porting carries your existing product forward, including prepayment privileges and the penalty clause. If your current mortgage has terms you dislike, porting keeps them.
• The timing does not fit. If the sale and purchase cannot happen inside the window, the decision is made for you.
• You need more flexibility than a blend allows. Sometimes a clean start with a lender who wants the business is simply a better outcome.

Bridge financing sits alongside this

Porting solves the penalty. It does not solve the gap when your purchase closes before your sale.

Those are separate problems and they frequently occur together. Bridge financing covers the overlap, and it is common enough that lenders have a standard product for it. Our bridge financing page explains how that works.

What to do before you list

Call your lender, or ask us to, and get four answers in writing.

1. Is the mortgage portable at all? Not every product is.
2. How long is the porting window between closings?
3. What would the penalty be if you did not port?
4. If you need more money, is it blend and extend or blend to term, and at what rate?

With those four facts you can make an informed decision about sequencing your sale and purchase. Without them you are guessing, and the guess is expensive in one direction only.

Send us your mortgage documents and we will pull the answers out of them, then compare porting against starting fresh on your actual numbers.