Jumping into the housing market can be pretty intimidating right now, and one of the biggest challenges for buyers is dealing with those high interest rates. If you've bought a home in the past few years, you're probably aware that interest rates have more than doubled since 2020. So, if you're considering a 30-year fixed-rate mortgage, you can expect an average interest rate ranging from 6% to 7%. It's definitely something to keep in mind while making your home-buying decisions.

So, if you're thinking about moving, you might be worried about how expensive it could be to give up your nice, low interest rate and get stuck with a much higher rate.

Have you ever heard of "mortgage porting"? It's this neat practice that lets you transfer the terms of your current mortgage over to a new property. But wait, how does it actually work? And what do you need to do to qualify? Well, I've got some expert advice for you that will give you all the info you need before you even think about porting your mortgage.

What is porting a mortgage?

So, basically, when you port a mortgage, you're just moving your existing mortgage over to a new house. Everything stays the same, like the interest rate and when you have to make your payments.

So here's the thing: you can't just take your loan and slap it onto your shiny new home. Nope, it's not that simple. When you want to move your mortgage to a different property, it usually means you have to apply for your current loan all over again, even though you've already been approved once. Bit of a hassle, right? But it's the way things work when it comes to porting a mortgage.

So here's the deal: you gotta figure out if you and your mortgage are eligible, alright?

How to determine if your mortgage is eligible

If you're currently looking for a home and dealing with high interest rates, the idea of saving a ton of money over the life of a new loan can be a total game-changer. However, before you get too caught up in your home search, it's important to make sure that you'll be able to transfer your mortgage to a new property.

“Eligibility for porting a mortgage is varied—you never know what you’re gonna get,”

“Some lenders allow it, others don’t. And not all mortgages are portable.””

— James Allen, Financial Advisor of Billpin.

You know, with most variable-rate mortgages, the kind where the interest rate can change, you usually can't bring that mortgage with you if you decide to move.

Hey there! Another factor that can impact your eligibility is how much you plan to borrow for your mortgage in relation to the price of the house you're eyeing.

““You can’t port if you’re moving into a less expensive home and don’t require the entire existing mortgage,” ”

— Dennis Shirshikov, of Awning.com.

If you're thinking about moving to a new place that's priced the same as your current mortgage or even higher, there's a chance you could transfer your mortgage over. It's called "porting" your mortgage, and it could be an option worth considering.

““If the mortgage you’ll need for the new property is larger, your lender may offer you a ‘blend and extend,’”

“It’s like mixing the old and new, where you end up with a rate that mixes your old and current rates.””

— James Allen, Financial Advisor of Billpin.

Are you eligible?

Have you thought about whether you're eligible for porting as a borrower? It's definitely something to consider.

““The standard requirement is an excellent repayment history and meeting your lender’s affordability criteria for the new property,”
”

— Shirshikov

Your lender is probably going to ask you to fill out a whole new loan application. They want to make sure you can afford the mortgage, so they'll do some checks on your finances. Oh, and they'll also check your credit score, and your co-applicants too if you have one. It's just part of the process, you know? But don't worry, we'll help you through it!

Some lenders might actually have some extra conditions for you. You know, like asking you to borrow some more money against the equity in your home, if the new place you want to buy is more expensive. Can you believe that? It's like they really want to make sure you have enough dough to cover it all.

When porting is a good idea

If you got a better deal on your mortgage in the past and won't be able to get the same terms again, it's worth considering porting your mortgage. It just makes sense!

““Porting is most advantageous when your current mortgage rate is significantly lower than market rates,”

“However, if the current market rates are lower or the same, it might be worth exploring a new mortgage instead.””

— Shirshikov

How to port your mortgage

When it comes to porting your mortgage, the first thing you should do is have a chat with your current mortgage team.

““Speak with your current lender to confirm portability and understand the process,”

“Remember to consider all costs, including potential penalties or fees associated with porting, to make sure it makes sense financially.””

— Shirshikov

Hey there! When it comes to getting a loan, lenders usually make their eligibility decisions pretty quickly. But even though they try to move things along, sometimes the whole process can take a few weeks. That's why it's smart to kick things off early, so you're not left waiting around at the last minute.

““The timeline depends on factors like the real estate market and your personal circumstances, but typically it aligns with the closing date of your new property,”

”

— Shirshikov

The final word

Before you decide to transfer your mortgage, make sure to look around and see if there are any better interest rates available in the market. It's important to shop around and double-check if your current rate is still the best option for you.

So here's the thing, if you're looking for a loan, the type you need, the amount, and even some life changes you've had since your last mortgage could mean there are better interest rates out there for you. It's definitely worth checking out!