Mortgage portability in Canada: the timing rule that can cost you a penalty
Porting your mortgage can let you keep your current rate and avoid a prepayment penalty when you sell and buy. But the feature comes with a deadline, a new approval and different rules if you need more or less money. Here's how mortgage portability works in Canada, with worked examples.
Mortgage portability lets you move your existing mortgage, including its balance, interest rate and terms, from the home you sell to the home you buy, so you don't break the contract and pay a prepayment penalty, per FCAC. It isn't automatic. You have to check that your mortgage is portable, re-qualify with your lender, and close the sale and purchase within the lender's porting window. If your new home needs a smaller mortgage, FCAC says you may pay a penalty on the difference. If you need more, the lender usually adds new money at today's rate. In our example, porting a $400,000 balance at 4.19% instead of taking an assumed 4.69% saves about $4,830 in interest over the 30 months left on the term, and avoids a penalty of at least $4,190.
Key takeaways
- →Mortgage portability lets you take your balance, rate and terms to a new home, so you don't have to break your mortgage when you move, per FCAC.
- →Timing is the catch. Lenders set a deadline between your sale and your purchase; miss it and the usual prepayment penalty can apply.
- →You still have to qualify. Your lender reviews your income, credit and the new property before it approves the port.
- →Buying cheaper? FCAC says you may pay a penalty on the part of the mortgage you no longer need.
- →Insured mortgage? CMHC's portability feature can reduce or remove a new insurance premium if the rules are met.
Short answer: Mortgage portability in Canada is a feature that lets you transfer your existing mortgage, including its balance, interest rate and terms and conditions, from the home you sell to the home you buy [1]. The main reasons to port are to keep a rate you like and to avoid the prepayment penalty you'd pay for breaking your mortgage early [1][2]. It isn't automatic: you need a portable mortgage, a new approval from your lender and a sale and purchase that close within your lender's time limit.
This guide explains the timing rule, what happens when you need more or less money, and how porting compares with breaking your mortgage. If your term is close to ending anyway, our mortgage renewal page explains your options.
How mortgage portability works
When you sell a home, you normally pay off the mortgage, and FCAC notes that paying back your mortgage before the end of the term, including when you sell, can trigger a prepayment penalty [2]. Porting avoids that by moving the mortgage to your next home instead [2].
- Check your contract. FCAC says to ask your lender whether your mortgage is eligible for porting and what restrictions apply [1].
- Apply with your lender. In our experience, the lender treats a port much like a new approval: it re-checks your income, credit and the new property's value.
- Line up the dates. The sale of your current home and the purchase of the new one need to close within your lender's porting window.
- Sign the new mortgage documents with your lawyer (or notary in Quebec), as with any purchase.
The timing rule that can cost you a penalty
Every portable mortgage has a time limit for completing the move. In our experience, many lenders set this window somewhere between about 30 and 120 days between closing the sale and closing the purchase, and some are stricter about the order of the two closings. Your contract sets the actual rule.
Why it matters: if you sell first and your purchase closes after the window, the port may no longer be available, and the prepayment penalty for paying off the old mortgage can apply [2]. In our experience, some lenders collect the penalty when the sale closes and refund it once the port is completed within the window, so you may need cash or room in your sale proceeds to cover it for a short time.
Practical tip: before you sign an offer on either property, ask your lender in writing how long the window is, whether it runs from the sale or the purchase, and whether the penalty is waived or refunded.
Moving before your term ends? A licensed 8Twelve agent can check your porting rules, compare a port with a new mortgage across 65+ lenders, and time your closings, OAC. Review your options
Upsizing, downsizing or staying the same
| Your next home needs... | What usually happens | What to check |
|---|---|---|
| The same mortgage amount | Balance, rate and remaining term move across [1] | Approval, the porting window |
| A bigger mortgage | The ported balance keeps its rate; the extra is new money at today's rate, often blended | How the blended rate is calculated, the new term |
| A smaller mortgage | You may pay a prepayment penalty on the difference [1] | Penalty method; whether a lump-sum prepayment privilege helps first |
"What usually happens" for bigger mortgages is our experience across lenders; rules vary.
Bigger mortgage example: you port a $400,000 balance at 4.19% and need $200,000 more at an assumed 4.69%. A simple weighted average puts the combined rate at about 4.36%. Lenders use different blending methods, so ask for the exact rate and term in writing.
Smaller mortgage example: you move to a home that needs only a $300,000 mortgage. FCAC says you may pay a penalty on the $100,000 you no longer need [1]. If your lender charges three months' interest, that's about $1,048 at 4.19%, rather than about $4,190 on the full balance. Using your annual prepayment privileges before you move can shrink the balance first [2].
Examples calculated in Python. Rates are assumptions for illustration, not offers.
Port or break? A worked example
You have $400,000 left at 4.19%, 22 years of amortization and 30 months left on your term. Today's rate for a new mortgage is assumed to be 4.69%.
| Port (keep 4.19%) | Break and take 4.69% | |
|---|---|---|
| Monthly payment | about $2,314 | about $2,422 |
| Interest over the remaining 30 months | about $40,090 | about $44,920 |
| Prepayment penalty | None, if ported in time | At least about $4,190 (three months' interest); more if the interest rate differential (IRD) applies [2] |
Porting here saves about $4,830 in interest over the rest of the term, plus the penalty. The answer can flip if today's rates are well below yours; then breaking, paying the penalty and taking a lower rate may cost less. FCAC explains that the penalty is usually the higher of three months' interest or the IRD [2].
If your mortgage is insured
If you put less than 20% down, your mortgage likely carries default insurance. CMHC's portability feature lets you transfer existing CMHC insurance to the new property [3]:
- Straight portability: no new premium if the new loan amount, LTV and amortization are the same or lower [3].
- More money or a higher LTV: a premium applies. For new money, CMHC charges the lower of the top-up rate on the increase or the regular rate on the total loan [3].
- Premium credit: if you port within 2 years of the original closing, CMHC may credit 100%, 50% or 25% of the premium you already paid, depending on whether it's within 6, 12 or 24 months [3].
- Timing: the request must reach CMHC within 6 months of your old home's closing [3].
Sagen and Canada Guaranty insure mortgages too and have their own rules; your lender will apply the insurer on your file.
When porting may not fit
- Your rate is higher than today's. Breaking and starting fresh may cost less overall.
- Some variable-rate mortgages aren't portable, or must be converted to fixed first. In our experience this varies widely; check your contract.
- Your income or credit has changed. A port needs approval; if you wouldn't qualify, plan for that before you list.
- Your term ends soon. If renewal is a few months away, a new mortgage at renewal may be simpler. See our mortgage renewal guide and how mortgage transfer fees work if you'd rather switch lenders.
From our desk: the most expensive porting mistakes we see are about dates, not rates. Ask for the porting window before you list, and build your closing dates around it.
Mortgage portability can let you keep your rate and skip a penalty when you move, but only if your mortgage allows it, you re-qualify and you close inside the lender's window. Check those three things before you sign an offer.
Run the numbers: estimate payments with our mortgage payment calculator, or see your prepayment privileges before you move.
This article is for general information only and isn't financial, legal or tax advice. Rates, products and terms change without notice and are available on approved credit (OAC). The rate and terms you qualify for depend on your individual financial situation, including credit, income, property and loan-to-value. "Best rates" means the most suitable options available for your situation, not a guarantee of the lowest rate. Example rates and payments are for illustration only, as of October 2026, and are not an offer. 8Twelve Mortgage arranges mortgages through 65+ lenders and does not lend directly. Licensed across Canada — see our licences.
Examples are for illustration only, as of October 31, 2026, and are not offers. Porting rules, windows, blending methods and penalties vary by lender and are set out in your mortgage contract; approval is OAC. Rules checked against FCAC and CMHC on October 31, 2026. 8Twelve does not lend or fund mortgages; we arrange them with third-party lenders.
Frequently asked questions
Sources
Last reviewed on November 3, 2026