Can a mortgage be assumed by a new borrower, and what happens to the existing mortgage insurance coverage?
A lender is not required to notify Sagen of an assumption provided the loan is in good standing, the terms remain unchanged, all supporting documentation is retained and the new or remaining covenant(s) are of the same or higher quality to those originally insured by Sagen .
Key Points
Someone else can take over your mortgage if you've made all your payments on time for the past year.
When someone assumes your mortgage, the original interest rate and terms stay the same.
The person taking over your mortgage needs to be as creditworthy as you were when you got the mortgage.
Your lender will check to make sure the new borrower qualifies for the mortgage based on their own rules.
Technical Research Verification
Our systems synchronized 4 data points and regulatory frameworks to verify this technical brief.
Related Questions
How does the stress test differ for fixed vs. variable in 2026?
Both are stress-tested at the higher of the benchmark (5.25%) or the contract rate + 2%.
Why are 3-year fixed rates dominating the 2026 market?
Borrowers are hesitant to lock in for 5 years at current levels, but find 1-2 year rates too expensive.
Fixed vs. Variable Comparison Table
Fixed locks a 5-year rate with IRD penalty risk; variable floats with prime and typically caps break fees at 3 months interest.
What is the 'IRD' penalty risk for 5-year fixed borrowers?
The Interest Rate Differential (IRD) can cost tens of thousands if you break a fixed mortgage when market rates have dropped.