# Porting Your Mortgage When You Move — Rules, Timing, and the Port-and-Increase Blend

> How Canadian mortgage portability works in practice — lender timing windows, port-and-increase blend math, penalty exposure, and what breaks a port at closing.

Category: Purchase
Last verified: 2026-04-20
Source: https://ratellow.com/scenarios/porting-mortgage-when-moving-canada

## Who this is for
Salaried homeowners mid-term in a fixed-rate mortgage who are selling their current property and purchasing a new one simultaneously, and want to carry their existing rate and avoid a prepayment penalty.

## Summary
Porting transfers your existing mortgage balance, rate, and remaining term to a new property — avoiding the prepayment penalty that would otherwise apply to breaking mid-term. In practice, the mechanics are more constrained than lenders' marketing suggests: closing dates must align within a lender-specific window (typically 30–120 days), you must re-qualify on the new property under current underwriting standards, and any top-up above your ported balance is funded at today's rate in a blended product. The blend math on a port-and-increase is the single most consequential calculation most borrowers never run before signing.

## Worked example
A salaried borrower has $420,000 remaining on a 5-year fixed at 2.89%, with 28 months left. They are selling at $780,000 and purchasing at $1,050,000. The lender allows a 90-day port window. The new purchase requires $630,000 in mortgage financing (40% down on $1,050,000), meaning a $210,000 top-up above the ported balance. The lender's current 5-year fixed for the top-up tranche is 5.25%.

- Ported balance at existing rate: $420,000 @ 2.89%
- Top-up tranche at current rate: $210,000 @ 5.25%
- Blended rate on combined $630,000: ~3.68% (weighted average)
- IRD penalty if port breaks: ~$18,000–$24,000 (lender-formula dependent)
- New term on blended mortgage: 5 years from new close (term resets on top-up)

## Framework
### What portability actually means in a mortgage contract
Portability is a contractual privilege — not a statutory right — that allows the borrower to transfer the outstanding principal, rate, and remaining term to a replacement property without triggering the prepayment charge. The clause appears in most closed fixed-rate mortgages from federally regulated lenders, but the specific conditions vary materially by lender. Key variables embedded in the clause: (a) the permitted gap between sale closing and purchase closing, typically 30–120 days depending on the lender; (b) whether the port is subject to full re-qualification under B-20 stress test at the time of the new application; and (c) whether the property type on the new purchase is eligible (some lenders exclude cottages, rural properties, or properties above a certain acreage). Variable-rate mortgages are generally not portable — the penalty structure on a variable is three months' interest, which is usually small enough that porting is economically irrelevant anyway.

### The closing-date gap — the most common reason ports fail
The single most operationally fragile element of a port is the timing window between your sale closing and your purchase closing. Most major bank lenders allow 30–90 days; some monolines extend to 120 days. If your purchase closes before your sale, you are technically carrying two mortgages simultaneously and the port may not be recognized until the sale funds. If the gap exceeds the lender's window — even by one day — the port is voided, the penalty applies, and you are re-priced at current rates on the full balance. In a simultaneous sale-and-purchase transaction, coordinate your real estate lawyer, both agents, and the lender's port team at least 60 days in advance. Confirm the window in writing from the lender, not from a broker's verbal summary of the product sheet.

### Port-and-increase: the blend math every borrower should run
When the new purchase requires more financing than the ported balance, the lender funds the incremental amount at the current posted or discounted rate and blends the two tranches into a single payment. The blended rate is a weighted average: **Blended rate = (Ported balance × Existing rate + Top-up balance × Current rate) ÷ Total new balance**. Using the worked example: ($420,000 × 2.89% + $210,000 × 5.25%) ÷ $630,000 = (12,138 + 11,025) ÷ 630,000 = 3.68%. The critical nuance: the term on the blended mortgage typically resets to a full new term (usually 5 years) from the new closing date, not the remaining 28 months on the original. This means you are locking in the blended rate for longer than your original term would have run — which may or may not be advantageous depending on the rate outlook. Some lenders instead match the top-up term to the remaining term on the ported portion; confirm which structure your lender uses before proceeding.

### Re-qualification: you are not grandfathered
Porting does not exempt you from current underwriting standards. The lender will re-underwrite the full new mortgage amount — ported balance plus top-up — against your current income, debt load, and the new property's appraised value. Under OSFI Guideline B-20, the qualifying rate is the greater of the contract rate plus 200 bps or 5.25% (the floor as of 2026). For a borrower whose income or debt ratios have changed since the original approval — a new car loan, a parental leave period, a change in employment — the port can be declined even though the rate privilege technically exists. GDS and TDS limits (39% and 44% respectively for insured; lender-specific for uninsured) apply to the full new payment, not just the incremental amount. A borrower who qualified comfortably at $420,000 in 2021 may find the combined $630,000 at blended rates pushes their TDS above threshold.

### Insured vs. uninsured status on the new property
If the original mortgage was CMHC-insured and the new purchase price exceeds $1,500,000 (the insured cap raised in December 2024), the new mortgage cannot be insured — the ported balance loses its insured status and the full mortgage must be underwritten as conventional. This changes the minimum down payment requirement (20% on the full purchase price), the qualifying rate, and potentially the lender's appetite for the file. Conversely, if the original mortgage was uninsured and the new purchase is under $1,500,000 with less than 20% down, the borrower may need to re-insure — triggering a new CMHC premium on the full new balance, not just the incremental amount. The premium tiers post-December 2024 are: 4.00% on 5–9.99% down, 3.10% on 10–14.99%, 2.80% on 15–19.99%.

### When breaking and re-pricing beats porting
Porting is not always the optimal path. Run the break-even explicitly: **Penalty cost vs. rate savings over remaining term**. If the IRD penalty is $20,000 and the rate differential between your ported rate and today's best available rate is only 50 bps on a $630,000 balance, the annual saving from porting is approximately $3,150 — meaning the penalty pays back in roughly 6 years. If your remaining term is 28 months, you would never recover the penalty through rate savings alone. In a declining-rate environment (BoC overnight at 2.75% as of early 2026, with further cuts possible), a borrower who breaks, pays the penalty, and takes a new 3-year fixed at a competitive rate may outperform a 5-year blended port. The refinance-break-even framework applies directly here.

## Key considerations
- Confirm your lender's port window in the mortgage commitment document itself — not the product brochure. Windows differ between lenders and sometimes between product lines at the same lender. A 30-day window is effectively unusable in most Canadian real estate markets where conditional periods alone consume 10–14 days.
- The port privilege typically applies only to the same lender. Switching lenders at renewal or mid-term forfeits portability entirely — you pay the penalty and start fresh. This is a meaningful lock-in effect that should factor into your original lender selection.
- If your new property is in a different province, confirm the lender is licensed and active in that jurisdiction. Some monolines and credit unions are provincially restricted; a port to a property in a province where the lender doesn't operate is not possible regardless of the contract language.
- Bridge financing may be required if your purchase closes before your sale. Bridge loans are typically priced at prime plus 1.5–3.0% and are short-term (30–90 days). The cost is usually manageable, but confirm your lender offers bridge financing — not all do — and that the bridge does not void the port mechanics.
- A port-and-decrease (moving to a cheaper property) is less common but possible. The lender will apply the prepayment penalty to the portion of the balance being retired, not the full balance. Confirm whether the penalty is calculated on the delta or the full original balance — lender policies differ.

## Common mistakes
- Assuming the port is approved because the lender's website says the mortgage is 'portable.' The privilege exists but approval requires re-qualification — borrowers who have taken on new debt or changed employment since origination are declined at this stage, leaving them with a broken port, a penalty, and a compressed timeline to arrange new financing.
- Not confirming the closing-date gap in writing before firming up purchase and sale dates. A one-day overage voids the port; real estate transactions routinely slip by days due to title issues, lawyer delays, or buyer financing conditions. Build buffer into your closing-date spread.
- Ignoring the term reset on the blended mortgage. Borrowers focused on the blended rate often miss that they are committing to a new 5-year term from closing — locking in a rate that may be above market within 12–18 months if the BoC continues its easing cycle.
- Failing to model the break-even against simply paying the penalty. In a falling-rate environment, the IRD penalty on a low-rate mortgage from 2020–2022 vintage may be large, but the forward rate advantage of a fresh mortgage can exceed the porting benefit within 2–3 years.
- Treating the port as a refinance opportunity. Porting transfers the existing balance only — it does not allow you to access equity from the sold property or increase the amortization clock. Borrowers expecting to consolidate debt or extend amortization through a port will be disappointed; those goals require a separate refinance product.

## Action steps
1. Pull your mortgage commitment or annual statement and locate the portability clause. Note the exact permitted gap in days between sale and purchase closing, and confirm whether re-qualification is explicitly required.
2. Run the blend math before you list your current property. Calculate your blended rate at today's lender rate for the top-up tranche, then compare the total interest cost over the new term against breaking and taking a fresh mortgage at the best available rate net of penalty.
3. Contact your lender's port team — not a branch generalist — at least 60 days before your expected sale closing. Request written confirmation of the port window, the re-qualification requirements, and whether bridge financing is available through the same lender.
4. Have your income documentation current: two recent pay stubs, a letter of employment confirming salary and tenure, and your most recent T4. The port re-qualification is a full underwrite and documentation gaps cause delays that can breach the timing window.
5. If the purchase price exceeds $1,500,000, confirm with your broker whether the insured status of your existing mortgage is affected and what the down payment and qualifying implications are under the post-December 2024 CMHC cap rules.
6. Model the scenario where closing dates slip by 15–30 days and the port window is breached. Know your penalty exposure in advance so you can make a rational decision under time pressure rather than a reactive one.

## Sources
- Guideline B-20 — Residential Mortgage Underwriting Practices and Procedures — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures
- CMHC Mortgage Loan Insurance — Homeownership — https://www.cmhc-schl.gc.ca/professionals/project-funding-and-mortgage-financing/mortgage-loan-insurance/mortgage-loan-insurance-homeownership-programs
- Mortgage — Prepayment Privileges and Penalties — https://www.fcac-acfc.gc.ca/en/financial-products/mortgages
- Interest Rates — Monetary Policy — https://www.bankofcanada.ca/core-functions/monetary-policy/key-interest-rate/