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Mortgage Portability: The Right Option for You?
 May 2 2017     Posted by Tracy Bennett

Have all of your kids left the nest, leaving you with too much house? You might want to consider your mortgage options. Would you benefit from downsizing but want to avoid the hassle of another mortgage? The option of mortgage portability might be in your best interest.


What Is Mortgage Portability?


Mortgage portability is the ability for a homeowner to move their mortgage from one home to another. Homeowners do this when the interest rates on their mortgage are in their favour, so they take it to their new property. This option works really well for homeowners who wish to downsize.


How Does It Work?


Before diving head first into the unknown, check with your mortgage broker to see if the portability option is available for you and which lenders offer it. Next, consider if it is the best plan for you. Will moving your mortgage be in your best interest considering the current mortgage rates? Your broker can advise you and make a comparison.


If mortgage portability is available and a good option, discuss keeping the same rate for your current mortgage and transferring it to the new property. Then, sign the contract with your lender stipulating the amount will be paid back and your lender will agree to have the mortgage transferred.


If your lender doesn't offer mortgage portability but you still intend to downsize, you may be subjected to a fee/penalty to be released from your current mortgage. However, if interest rates are currently lower than those for your mortgage, it’s probably beneficial to lose the old mortgage rates and make a change.


Is It The Right Option?


Here are some considerations:


  • Pros

-       Keeping your current interest rate

-       Blending mortgage rates together

-       Penalties are almost non-existent


  • Cons

-       Mortgage portability may not be available (fees)

-       Your old mortgage may require a prepayment before you're allowed to downsize

-       The new rate offered may be at a lower interest rate than your ported mortgage



If you are in the market for a new home but do not want the hassle of a new mortgage while downsizing, give the professionals at Mortgage Architects a call today at 519-576-4869 or 1-866-896-8570 or email tracy.bennett@bennettcapital.ca

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