How to Port a Mortgage in Canada: Rules, Costs, and Pitfalls

You locked in a great rate two years ago. Now you are selling your home and buying another one. The question that comes up every single time: can you take that rate with you? That is what mortgage porting is, and in many cases it saves thousands of dollars. But not always. Here is how it actually works in Canada, what can go wrong, and how to figure out whether porting or breaking makes more sense for your situation.

What Does It Mean to Port a Mortgage?

Porting a mortgage means transferring your existing mortgage, with its current rate, balance, and remaining term, from your current property to a new one. You are not paying off the old mortgage and starting fresh. You are moving the same contract to a different address.

The benefit is straightforward: if your existing rate is lower than what the market offers today, porting lets you keep it. You avoid the prepayment penalty you would otherwise owe for breaking the mortgage early. For a homeowner with a fixed rate of 3.5% in a market where rates sit near 5%, that difference adds up fast.

Porting is not the same as assuming a mortgage (where a buyer takes over your loan). With porting, the mortgage follows you, the borrower, to the new property. The old property's mortgage charge is discharged, and a new one is registered on the property you are purchasing.

How Mortgage Porting Works, Step by Step

The process looks like this in practice:

1. Check your mortgage contract. Look for a portability clause. Not every mortgage has one, and the terms vary by lender.
2. Notify your lender early. As soon as you list your home (or even before), tell your lender you want to port. Some lenders need 30 days' notice.
3. Get approved on the new property. This is the part people miss. Porting is not automatic. You still have to qualify for the mortgage on the new home. The lender will appraise the new property, verify your current income, and run a credit check. You will also need to pass the federal stress test on any new funds.
4. Coordinate closing dates. The sale of your current property and the purchase of your new one need to happen within the lender's portability window (typically 30 to 120 days).
5. Close on both transactions. Your lawyer discharges the mortgage charge on the old property and registers a new one on the new property. If the timing does not line up perfectly, you may need bridge financing to cover the gap.

Which Lenders Allow Porting?

Most major Canadian lenders offer portability on fixed-rate mortgages, but the terms differ significantly. Here is a general breakdown:

Variable-rate mortgages are almost never portable. Since breaking a variable mortgage only costs three months' interest (no IRD penalty), the savings from porting are minimal anyway.

The Portability Clause: What to Look For

A portability clause is not standard boilerplate. The details matter, and they vary more than most people expect. When reviewing your mortgage agreement, check for these specifics:

• Time window. How many days do you have between closing on the sale and closing on the purchase? Some lenders allow 30 days; others give you up to 120.
• Same province or any province? Regional lenders may not be able to register a mortgage charge in a different province.
• Increase allowed? Can you borrow more on the new property, or does the ported balance have to match exactly?
• Qualification requirements. Will you need to re-qualify at the stress-tested rate for the full amount, or only for the increase?
• Property type restrictions. Some portability clauses exclude certain property types (rental properties, cottages, vacant land).

If your current mortgage does not have a portability clause, porting is off the table. This is worth checking before you even start house hunting. A quick call to your lender or a review of your commitment letter will tell you where you stand.

Blend and Extend: When You Need More Money

Most people who move are not buying the exact same value of home. If you need to borrow more than your current balance, lenders offer a blend-and-extend option. Here is how it works:

Your existing balance stays at the current rate. The new money comes at today's rate. The lender blends the two into a single weighted average rate. You also have the option to extend the term so the entire mortgage matures on the same date.

For example, say you port $300,000 at 3.50% and borrow an additional $100,000 at 5.25%. The blended rate would be approximately 3.94%, calculated as a weighted average. That is meaningfully better than refinancing the whole $400,000 at 5.25%.

Not every lender handles blend-and-extend the same way. Some blend into a single rate. Others keep the two portions separate with different maturity dates. A mortgage broker can walk you through your lender's specific approach before you commit.

Porting vs. Breaking: A Real-Dollar Comparison

Let us run the numbers on a common scenario. You have a $400,000 mortgage at 3.50% fixed, with 3 years remaining on a 5-year term. Today's 3-year fixed rate is 4.75%.

Option A: Port the Mortgage

Option B: Break and Get a New Mortgage

In this scenario, porting saves roughly $7,500 to $11,500 in upfront costs, plus about $274 per month in lower payments over the remaining 3 years. That is over $9,800 in payment savings alone, on top of avoiding the penalty. The math here is not close.

But the picture changes if your current rate is close to (or higher than) today's rates. If you locked in at 5.50% and today's rate is 4.75%, porting means keeping a more expensive mortgage. In that case, paying a three-month interest penalty to break a variable, or even an IRD penalty on a fixed, could pay for itself within a year of lower payments.

Timeline Requirements and Deadlines

Timing is the most common reason ports fall apart. Every lender sets a window between when you sell and when you must close on the new purchase. Miss it and the port is cancelled. You will owe the full prepayment penalty on the original mortgage, exactly the cost you were trying to avoid.

Here is what a typical timeline looks like:

• Day 0: You sell your current property and the mortgage is discharged at closing.
• Day 1 to 90 (or 120): The portability window. You must close on the new purchase within this period.
• During the gap: If your sale closes before your purchase, you may need bridge financing to cover the interim period. Some lenders will hold the ported funds in a suspense account; others will not.

The safest approach: try to align closing dates as closely as possible. If you cannot, confirm with your lender exactly how the gap period is handled and whether bridge financing is built into the port arrangement or needs to be arranged separately.

Common Pitfalls That Kill a Port

Porting sounds simple on paper, but these issues derail the process more often than you would expect:

1. Failing to re-qualify. Your income, debts, or credit may have changed since you first got the mortgage. The lender will re-underwrite you. If your debt ratios no longer meet guidelines, the port gets declined. This catches people who have taken on car loans, changed jobs, or whose income structure has shifted (common for self-employed borrowers).
2. Low appraisal on the new property. If the new home appraises below the purchase price, the loan-to-value ratio may exceed the lender's maximum. You will need more cash or the port fails.
3. Missing the deadline. Construction delays on a new build, a chain of transactions that depends on multiple closings, or a buyer who backs out of purchasing your home can all push you past the portability window.
4. Property type mismatch. Porting from a residential property to a cottage, a rental property, or a mixed-use building may not be allowed under your portability clause.
5. Switching to a shorter amortization unintentionally. When you port, the remaining amortization carries over. If your original 25-year mortgage is now at 22 years, you port with 22 years remaining. That means higher payments than a fresh 25-year or 30-year mortgage would require.

When Porting Saves You Money (and When It Does Not)

Porting is clearly the right move when your existing rate is meaningfully below today's market and you have significant time remaining on your term. A rate difference of 1% or more with 2+ years left almost always makes porting worthwhile.

Porting is less attractive (or outright worse) when:

• Your existing rate is at or above current market rates. Breaking and renewing into a better rate saves money over the remaining term.
• You have a variable-rate mortgage. The three-month interest penalty to break is usually manageable, and you gain the flexibility to shop the entire market.
• You need significantly more money. A blend-and-extend at a high current rate may not be as competitive as a fresh mortgage with a lender offering aggressive pricing on the full amount.
• You want to change lenders. Porting means staying with your current lender. If their service has been poor or their renewal offers are not competitive, you lose the ability to shop around.
• You want to change your rate type (fixed to variable or vice versa). Porting locks you into the same product type.

The bottom line: run the numbers both ways before deciding. The prepayment penalty is a known quantity (your lender must disclose it), and comparing it against the rate savings from porting gives you a clear answer.