Follow Us:

Buying Your Next Home & Moving Your Mortgage

Q: Should I port my mortgage or get a new mortgage?

Compare the value of keeping your existing mortgage terms with the rates, penalties, features and flexibility available through a new mortgage. Porting can be attractive when your current rate is favourable or breaking the mortgage would create a large penalty, but it is not automatically the lowest-cost option.

Buying your first home is largely about getting into the market.

Buying your next home introduces another question:

What happens to the home and mortgage you already have?

You may be upsizing, downsizing, relocating or simply looking for a different property.

Whatever the reason, coordinating the sale of one home with the purchase of another can make the mortgage strategy more complicated.

Planning early can help you understand the equity available, possible penalties and financing options before you commit to another property.

What Happens to Your Current Mortgage When You Move?

Your mortgage does not automatically move to the new property.

Depending on the mortgage, you may have several possibilities:

- pay out the existing mortgage

- port it to the new property

- refinance

- arrange new financing

- blend existing mortgage terms with additional financing

Which option is available depends on your current mortgage contract and lender.

What Is Mortgage Portability?

A portable mortgage may allow you to transfer some or all of your existing mortgage terms to another property.

This can be particularly useful when your existing interest rate is attractive or when breaking the mortgage would result in a significant penalty.

Portability is not automatic.

The new property must normally satisfy lender requirements and you must still qualify for the financing.

There are also timelines and conditions that can apply.

What If the New Home Costs More?

If you are purchasing a more expensive property, your existing mortgage may not provide enough financing.

Depending on the lender, you may be able to port the existing mortgage and arrange additional borrowing.

Alternatively, replacing the existing financing with a completely new mortgage may make more sense.

The right decision requires comparing:

- existing mortgage rate

- potential penalty

- new mortgage rates

- mortgage features

- additional amount required

- remaining term

- future plans

Can You Buy Before You Sell?

Potentially. Some homeowners can qualify to purchase another property before their existing home is sold. However, carrying two homes creates additional financial obligations and qualification considerations. If your existing property has a firm sale but the closing dates do not align, short-term bridge financing may sometimes be available to cover the timing difference. Bridge financing is not the same as financing an unsold property indefinitely. Requirements vary by lender.

How Much Equity Will You Have?

Your home's sale price isn't equal to the cash you'll have available for the next purchase.

You need to subtract items such as:

- remaining mortgage balance

- mortgage penalty, if applicable

- real estate transaction costs

- legal costs

- other debts secured against the property

The amount remaining becomes part of the equity available for the next purchase. Understanding this number early can substantially improve your next-home planning.

Should You Keep Your Existing Mortgage?

Maybe.

A low existing mortgage rate can be valuable.

But rate alone shouldn't determine the decision.

A new mortgage could offer different penalties, prepayment privileges, flexibility or financing options that better suit the next property.

The complete mortgage should be compared.

Coordinate the Sale and Purchase

Your realtor, mortgage professional and lawyer or notary should understand the timing of both transactions.

Important dates include:

- sale completion

- purchase completion

- mortgage maturity

- financing deadlines

- possession dates

Poor coordination can create unnecessary financing stress.

Plan Your Next Mortgage Before Your Next Offer.

You learned a lot buying your first home.

Your next purchase deserves an equally deliberate financing strategy.

Before listing, buying or making an offer, understand:

- your available equity

- your existing mortgage penalty

- whether the mortgage can be ported

- how much additional financing you may need

- what you can comfortably afford

At Haystax Mortgage, we can help you look at the old mortgage and the new mortgage as one connected financial decision.

Planning your next move? Talk with Haystax Mortgage before you make the next offer. Find a Haystax Mortgage location here

Why Work With Haystax Mortgage?

More than one lender. More than one option.

A bank can generally offer you its own mortgage products. A mortgage brokerage can explore options from a broader range of lenders.

But access to lenders is only part of the value.

A Haystax Mortgage professional can help you understand:

how different mortgage structures compare
which lender requirements may fit your situation
the trade-offs between rate and flexibility
penalties and prepayment privileges
how your mortgage fits your longer-term financial plans

You're at HOME with Haystax!

FIND A HAYSTAX MORTGAGE PROFESSIONAL

Frequently Asked Questions

Can I move my mortgage to another house?

Some mortgages are portable, meaning the lender may allow qualifying borrowers to transfer existing mortgage terms to a new property. Portability depends on the mortgage contract, lender, new property and borrower qualification.

What happens to my mortgage when I sell my house?

The mortgage normally needs to be paid out, discharged or otherwise dealt with as part of the sale. If you are breaking a closed mortgage before maturity, a prepayment penalty may apply.

Can I buy my next home before selling my current home?

Potentially, if you can qualify while carrying the existing obligations. The lender will consider both properties and your overall debt position.

What is bridge financing?

Bridge financing is short-term financing that can help when the purchase of a new home closes before the sale proceeds from an existing home become available. Lenders establish specific requirements for bridge loans.

Should I port my mortgage or get a new mortgage?

Compare the existing rate and penalty with the rates, features and flexibility available through a new mortgage. Porting can be attractive in some circumstances, but it isn't automatically the lowest-cost choice.