Portable Mortgage

Most Canadian fixed-rate mortgages include a port feature: when you sell your current home and buy a new one within the same closing window (typically 30 to 90 days, depending on lender), you can take your existing mortgage rate and remaining term to the new property without penalty. If the new property requires a larger mortgage, lenders "blend" — averaging your existing rate with their current rate on the additional amount, weighted by the dollar amounts. This is called "port and increase" or "blend and extend". If the new property requires a smaller mortgage, you simply pay down the difference and keep the rate. If you can't time sale and purchase to the same closing window, you can sometimes "port with bridge" — your lawyer arranges short-term bridge financing to span the gap. The port feature is most valuable in a rising-rate environment when your existing rate is below market — porting saves you the IRD penalty AND gets you a below-market rate on the new home.