What porting actually means
Porting transfers your existing mortgage, including its rate and remaining term, from the property you are selling to the one you are buying. The appeal is obvious: you keep a rate you like and avoid the prepayment penalty for breaking early. The catch is that you are not really moving the mortgage. You are discharging it on one property and registering a new one on another, under your lender's porting rules.
The timeline is the trap
Most lenders give you a window, often thirty to ninety days, between the sale of your old home and the closing of your new one. In a normal Toronto market that is fine. In a slow one, or when your purchase closes before your sale, you can fall outside the window and lose the port entirely. Bridge financing can cover a gap, but the porting clock keeps ticking.
- Confirm the exact porting window in writing before listing
- Line up your sale and purchase closing dates deliberately
- Ask about bridge financing if the dates will not line up
You re-qualify, every time
A port is not automatic. You must re-qualify for the mortgage under current rules, on the new property, at today's income and debts. If your income dropped, you took on a car loan, or the new home is a different property type, the lender can decline the port even though you already hold the mortgage.
The blend problem
If your new home costs more and you need a larger mortgage, most lenders blend your existing rate with a new rate on the additional amount. That blended rate is rarely the best available on the market. Before accepting it, compare the total cost of the blend against paying the penalty and taking a brand new mortgage at a competitive rate. The math surprises people in both directions.
When breaking is the better move
If the penalty is small, the remaining term is short, or today's rates beat your existing one, breaking the mortgage and starting fresh often wins. A broker can run both scenarios side by side, including penalties, the blended rate, and the new payment, so the decision is based on dollars rather than loyalty to the current term.
Frequently asked questions
- Can I port my mortgage to a cheaper home?
- Usually yes. You port a smaller amount and prepay the difference, which can trigger a partial penalty. The lender re-qualifies you on the new property either way.
- Does porting work if I switch lenders?
- No. Porting only exists within your current lender. Moving to a new lender is a refinance or a switch, and any penalty for breaking applies.
- How long do I have to port after selling?
- Commonly thirty to ninety days depending on the lender. Get the exact window confirmed before you firm up either closing date.