Meeting the outlays of buying a house is solely possible if you make a fortune or if you opt for a mortgage. Sometimes you take amortgage porting calculator to buy a property and with due course of time you find the house of your dreams. So you decide to sell your current home so that you can shift to another house. With your current mortgage that is persistent for a few years, what do you do? Break your mortgage? The easier, quicker and feasible solution as compared to breaking your mortgage is porting mortgage explained as you move your furniture from the old house to your new dwelling, your existing mortgage can be transferred with its current rate and terms to the new property.
Under what circumstance can you port your mortgage?
- The sole condition for porting your current mortgage is you have to simultaneously sell your current property while you buy a new one.
- Generally only fixed interest mortgages are portable.
What to do if you need additional money during porting mortgage?
Needing financial assistance in the form of the mortgage while buying a bigger and better house is a common dilemma which can be effortlessly handled by your lender by offering you blend and extend which is a weighted average of the old mortgage interest rate and extra money at current mortgage rate.
For example, if you have a prevailing C$300000 balance on your mortgage with a fixed rate of 3.1% and you are half way through a 5 year plan. Now you have liked a new property requiring you to take an additional mortgage of C$100000. You can break the existing mortgage of C$300000 and pay the penalty or opt for additional loan from your lender at a blended mortgage rate between 3.1%-3.69%, assuming the current rate of mortgage for additional C$100000 is 3.69%
Porting is an excellent option to save yourself from hefty penalty charges. Before you consider porting, ensure that the new mortgage rate offered by lenders is less than your blended rate otherwise it makes no sense porting.