Three mortgage options to understand before moving

A portable mortgage may let you transfer your existing mortgage arrangement to another property. This can help preserve contractual terms, but portability is a feature with conditions rather than a promise that every future property or application will qualify.

Ask the lender to review the new property, borrowing amount and your current financial circumstances. A change in income, debts or property type can affect approval. If you need more financing, ask how the additional amount will be priced and whether the resulting structure changes your flexibility.

Timing also matters. Coordinate the sale and purchase dates with the lender and lawyer, and ask what happens if they do not line up. Do not assume that a temporary payout, a later purchase or a smaller mortgage will receive the same treatment as a straightforward port.

A lender may offer a blended rate when changing an existing mortgage arrangement. FCAC describes blend-and-extend as an early renewal option that combines the old rate with a new term’s rate. It can avoid a prepayment penalty under that arrangement, although administrative fees may apply.

The lender’s calculation matters. Ask for the resulting rate, term, payment, amortization and balance, along with all fees. A blended rate is not necessarily the simple average of two advertised rates. The amounts and time periods involved affect the proposal.

Extending the term also changes how long the new commitment lasts. Compare the offer with keeping the existing mortgage where possible, or paying it out and arranging another mortgage. Include any break costs rather than comparing only the blended rate with a new headline rate.

An assumable mortgage may allow a buyer to take over a seller’s existing mortgage, with lender approval. This differs from porting: the mortgage stays connected to the purchased property while the borrower changes. The lender must confirm whether assumption is available and on what conditions.

The existing mortgage may not cover the full purchase price. The buyer still needs an approved plan for the remaining funds and transaction costs. Do not assume that an attractive existing rate solves the down payment, financing or qualification requirements.

For the seller, a crucial question is whether the lender fully releases them from liability. Have the lender and lawyer confirm the legal result in writing. A buyer taking over payments is not, by itself, sufficient evidence that the seller has no remaining obligation.

Start with your current mortgage agreement, a recent statement, the expected sale proceeds and the proposed purchase budget. Then request written options based on the same closing dates and borrowing needs. Include penalties, fees, cash-back repayment obligations and any additional financing.

Porting may preserve useful terms, blending may offer a workable modification, and assumption may suit a particular transaction. None is automatically preferable. The decision depends on approval, total costs, the resulting contract and how well it supports your next stage.

For a Bedford or Halifax move, Rahul can help organize the financing questions before dates become firm. Your lawyer should handle the legal transfer and liability issues. Leave enough time for both reviews rather than relying on a general description of a mortgage feature.