Porting a Mortgage in Calgary

Selling and cashing in on a bigger, modern home seems appealing to any homeowner. However, if the existing house is locked into a mortgage, it can be challenging to sell the property. 

That’s why you need to port your existing mortgage. By porting a mortgage, you take advantage of the existing mortgage terms and interest rates. Here’s more about porting a mortgage in Calgary.

What is Porting a Mortgage?

Porting a mortgage is the process of transferring your current mortgage to a new one using the current mortgage rate and terms. The homeowner doesn’t need to take out a new mortgage when buying a new home. 

They use the property sale proceeds to pay off the existing mortgage and apply for a new one using the same terms from the same lender. In addition to paying the new mortgage at the same interest rate, the lender may allow you to:

• Extend the loan term, e.g., from 25 years to 30 years
• Change the mortgage from a joint mortgage to a single-person mortgage

Porting a mortgage benefits homeowners who want to relocate, buy another property, or break their mortgage without paying penalty fees. 

Which Mortgages Qualify for Porting?

You want to know if you qualify to port a mortgage in Calgary before talking to your lender. Here’s what lenders look at:

The Value of the Existing Mortgage

You may be eligible for a new mortgage if the new home costs more than the remaining balance but you will only qualify for an amount equal to the original mortgage. 

The lender may check your income and credit history to determine if the new mortgage supports a higher or lower interest rate.

The Cost of the New Home

If the cost of the new home is more than the remaining loan balance, you will be required to blend the mortgages. This means the difference in the mortgage payments is blended into the new mortgage.

The Interest Rate

Lenders are more likely to port mortgages with fixed rates than those with variable rates. The volatile nature of variable rates makes it challenging to port as they could fluctuate throughout the loan term. 

Lenders may require the borrower to convert the mortgage into a fixed-rate mortgage before porting.

The Type of Property

Porting a mortgage in Calgary is necessary when financing standard homes like single-story residential homes, not non-standard properties (thatched cottages). Non-standard homes are harder to resell in the event of a repossession.

Why Consult Calgary Professionals When Porting a Mortgage

It’s best to consult a professional when porting a mortgage in Calgary. Our professionals are well-versed in this field and can help you find the best mortgage rates and terms. We will also explain how the industry works so you can find the best deal when buying or selling a home. 

Finding a good buying or selling price could save you thousands in mortgage payments. Another reason you should consider working with us is to help you streamline the process so you can port a mortgage in future.