Selling your home and moving into a new one can be a stressful experience. Why make it worse by worrying if you can carry your current mortgage over to your new home?

Having a portable option in your mortgage enables you to move to another property without losing your existing interest rate, mortgage balance and terms. The ability to port also allows you to increase your mortgage amount without paying a penalty. However, it’s important to note that not all mortgages are portable.

If you have a fixed-rate mortgage, it usually has a portability option. If you require additional funds, there are two ways lenders do this. Some lenders will do a blend and extend. They will look at the interest rate you have, compare it to the rate that is currently available, and then blend both rates. This will be the interest rate you will have for the new term. The amortization period might increase or remain the same.

Some lenders, most often banks, will allow your mortgage to remain in place and if you require more funds, they will give you another mortgage with the current interest rate, a new amortization period, and a new maturity date. The challenge here is that you will have two different mortgages renewing at different times and with different amortization periods. If you ever decide to move your mortgage to a new lender, you will have to pay a penalty because of the different renewal times.

If you have a variable-rate mortgage, porting is usually not available. As such, upon breaking your existing mortgage, a three-month interest penalty will be charged. This charge may or may not be reimbursed with your new mortgage.

While porting typically ensures no penalty will be charged when you sell your existing property and buy a new one, some conditions that may apply include:

• Some lenders allow you to port your mortgage, but the sale of your current home and the purchase of your new home must happen on the same day. Other lenders offer a week to do this, some a month, and others up to three months.

• Some lenders don’t allow a changed term or force you into a longer term as part of agreeing to port your mortgage.

• Some lenders will, in fact, reimburse your entire penalty, fixed or variable, if you simply get a new mortgage with the same lender – replacing the one being discharged. Additionally, some lenders will even allow you to move into a brand-new term of your choice and start fresh.

• There are instances where it’s better to pay a penalty at the time of selling and get into a new term at a brand-new rate that could save back your penalty over the course of the new term.