How does porting a mortgage work
Most A lenders portability policy waive all or part of the prepayment charge, and allows customers to take their current rate and term with them when they move or refinance, so long as:
• Minimum one borrower from the existing mortgage remains on the new mortgage
• The funding date must be within 120 days before or after the payout (closing of the first and second property must be within 120 days)
• Lender is provided proof of firm Purchase and sale agreements for both purchase and sale transactions.
The existing term is always transferred to the new mortgage, and if new mortgage amount is less than or equal to existing mortgage, the existing rate is transferred as is. You can port your mortgage even if the balance is a lot lower. The penalty for porting
your current mortgage for a much lower one will be based on your pre-payment feature of your current mortgage (10%, or15%, or 20%). So for example your current mortgage is $300,000 and your new mortgage will be $260,000 as long as your pre-payment is 15% or over there will not be a penalty. If however, the new mortgage amount is greater than the discharged mortgage, the existing rate is transferred with additional funds priced at current rates. The final rate is a blended rate of the existing and new rates. For either option, you will have to re qualify for the mortgage, which will include a full mortgage application, credit check, income verification and possibly an appraisal on the new property.
Please do not hesitate to contact one of our qualified mortgage brokers if you have further questions at 1-888-882-0786 .Source: www.resourcefulcapital.ca