So, you’re ready to move. It’s an exciting time, filled with new possibilities. But as a current homeowner in Ontario, you’re facing a major financial dilemma. You likely have an amazing, low-interest rate on your current mortgage that you secured a few years ago, and you really don't want to lose it.

The fear of breaking that mortgage and facing a massive prepayment penalty can make you feel stuck. Do you pass on your dream home to keep your great rate, or do you accept a huge fee and take on a new mortgage at today's higher interest rates?

Fortunately, there is a powerful third option that every homeowner should know about: porting your mortgage. Porting is the ability to take your existing mortgage contract—and its fantastic interest rate—with you to your new property. This guide will explain exactly how porting works, compare it directly to the alternative of refinancing, and provide a broker's analysis on how to decide which option will save you the most money.

What is Porting a Mortgage?

"Porting" is a feature available on most Canadian mortgages that allows you to effectively "move" your existing mortgage from the home you're selling to the new one you're buying.

"Moving" Your Mortgage

The simplest analogy is to think of it like moving your cell phone plan. When you move to a new house, you don't cancel your plan and get a new phone number; you simply call your provider and tell them your new address. Porting a mortgage works in a similar way. You are keeping your existing contract—with its specific interest rate, remaining term, and lender—but you are simply changing the property that it is secured against.

Who is Eligible to Port?

Most fixed-rate mortgages and some variable-rate mortgages from major lenders in Canada are portable. However, and this is a critical point, the port is not automatic. You must still formally re-qualify for the mortgage.

The lender needs to approve both you and the new property. This means you will have to go through a new application where the lender verifies your current income, confirms your credit score is still strong, and ensures the new property meets their lending guidelines. A significant change in your financial situation since you first got the mortgage could result in a denial of the port.

The "Port and Increase" Scenario

What happens if your new home is more expensive than your last one? This is a very common situation, and you can often "port and increase."

For example, let's say your existing mortgage balance is $500,000 at a great 2.99% rate, but you need a total of $700,000 for your new home. Your lender can allow you to:

Port the existing $500,000 at your current 2.99% rate.

Get new funds for the additional $200,000 at their current market rate (e.g., 5.5%).

The lender will then create a "blended" interest rate, which is a weighted average of the two rates. Your new, single mortgage payment would be based on this blended rate. This allows you to borrow the extra funds you need while still benefiting from the low rate on the majority of your mortgage.

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What is Refinancing?

Refinancing, in this context, is the alternative to porting. It involves a completely fresh start for your mortgage.

A Fresh Start

When you choose to refinance, you are making the decision to break your existing mortgage contract completely. You pay the full prepayment penalty to your current lender. You are then free to shop the entire market for a brand new mortgage for your new property. This new mortgage can be with any lender you choose, at their current market rates, and with new terms that you select.

Why Would Someone Choose This?

On the surface, paying a large penalty seems like a bad idea. However, the primary motivation for refinancing is to get access to the entire mortgage market to find the absolute best rate and features available. If another lender is offering a significantly lower rate than your current lender's "blended" rate, or if your current mortgage is not portable, the long-term savings from switching could potentially outweigh the short-term cost of the penalty.

Head-to-Head: Porting vs. Refinancing

The decision to port or refinance is one of the most important financial choices a homeowner can make when moving. The right answer is purely mathematical.

The Financial Calculation

Porting Cost: The primary cost is the administrative and legal fees associated with the move. If you need more money, the "cost" is the new blended interest rate, which will be higher than your old rate but likely lower than the full market rate.

Refinancing Cost: The primary cost is the potentially large prepayment penalty. The benefit is getting a brand new mortgage at what could be a better rate than the "blended" rate.

When Porting is the Clear Winner

You have a fantastic interest rate that is significantly lower than current market rates. This is the most common reason to port. In today's market (Tuesday, August 12, 2025), if you have a rate from 2021 or 2022, it is almost certainly much better than current rates.

Your prepayment penalty is very large. If your penalty is calculated using the Interest Rate Differential (IRD), it could be tens of thousands of dollars, making porting the only financially sensible option.

You are happy with your current lender and the features of your mortgage.

When Refinancing Might Be Smarter

Your prepayment penalty is very small or zero. If you are near the end of your term or have a variable-rate mortgage with a simple three-month interest penalty, the cost to break is low, giving you more freedom to shop around.

The interest rates on the market are significantly lower than your current mortgage rate. This is less common in the current environment but can happen.

You need more flexibility or features than your current mortgage offers, or you are simply unhappy with your current lender's service and want to make a change.

A Broker's Cost-Benefit Analysis

As mortgage brokers, this is where we provide immense value. We don't guess; we calculate. We will create a clear, side-by-side comparison for you:

Porting Scenario: We contact your current lender to get the exact blended rate they will offer you and calculate your total mortgage payments over the next five years.

Refinancing Scenario: We first calculate your exact prepayment penalty. Then, we shop the entire market to find the best alternative rate. We calculate your total payments over the next five years with this new mortgage and add the one-time penalty cost.

We then present you with the total cost of both options, giving you a clear, data-driven answer on which path will save you the most money.

The Porting Process: Key Considerations

If you decide that porting is the right move, there are a few important details to be aware of.

The Importance of a "Bridge Loan"

Porting a mortgage works most smoothly when the closing date of the home you are selling and the home you are buying is the exact same day. However, in the real world, this is often not possible. If you need to close on your new home before the sale of your old one is finalized (e.g., you buy your new home on the 15th of the month but sell your old one on the 25th), you will need a short-term bridge loan.

A bridge loan "bridges the gap" by lending you the down payment for your new home. You use it for a short period (e.g., 10 days), and then pay the loan back in full as soon as your old home sells. As brokers, we can easily arrange bridge financing as part of the overall porting process.

Approval is Not Guaranteed

It is crucial to remember that you must be fully re-approved for the mortgage. Your lender will want to see your current income documents and will pull a new credit report. If your financial situation has changed significantly since you first got the loan—for example, if you've changed to a self-employed role, taken on new debt, or if your credit score has dropped—the lender could decline your request to port the mortgage. This is why it's essential to start the process with a broker early.

Porting vs. Refinancing

The "port or refinance" decision is one of the most important a homeowner can make when moving houses. The right choice is not an emotional one; it's a decision that should be based on a clear and careful calculation of the costs and benefits. An expert analysis can be the difference between a smooth, cost-effective transition and a stressful, expensive one.

Before you even put a "For Sale" sign on your lawn, let's create a financial plan for your mortgage. Contact our brokerage today, and we’ll run a complete analysis to determine the most cost-effective way to finance your next home.

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