Reassessing Your Budget With Current Rates
Even if your first mortgage was arranged years ago, your new mortgage will be assessed under today's lending rules and stress test requirements. Get an updated pre-approval rather than assuming your old budget still applies, since qualifying rules and your income may have both changed since your last purchase.
Deciding Whether to Port or Start Fresh
Porting keeps your current mortgage terms attached to the new property, which can help if your existing rate is favourable. Starting a brand new mortgage gives you flexibility to shop lenders and terms. Compare both options with your broker, factoring in any penalty for breaking your current mortgage.
Managing Two Properties Temporarily
If your closing dates do not align perfectly, you may need short term financing like a bridge loan to cover the gap. Plan this early with your lawyer and broker so the timeline does not fall apart at the last minute.
- Confirm both closing dates early
- Ask about bridge loan eligibility
- Keep a cash buffer for overlap
Debt Ratios and Carrying Costs
Move-up buyers often carry more debt overall, including any renovation loans or lines of credit from their current home. Lenders will look at your total debt service ratio, so pay down other debts where possible before applying, since this can meaningfully increase your qualifying amount.
Working With a Broker Instead of Going Solo
A broker can compare options across multiple lenders and structure your financing around your specific move-up scenario, whether that is bridge financing, porting, or a fresh mortgage. This is especially useful when your situation involves timing two transactions at once.
Frequently asked questions
- Do I need to be pre-approved again if I already own a home?
- Yes, a fresh pre-approval reflects current rules and your current financial picture, which may differ from when you first bought.
- Is porting always the cheaper option?
- Not necessarily, it depends on your existing rate compared to current market rates and any fees involved, so it is worth comparing both paths.
- What if my current home has not sold by the time I need to close on my new one?
- This is where bridge financing or a longer closing negotiation comes in, and your broker can help you plan for this scenario ahead of time.