The client
A homeowner in Fort St. John whose $268,000 mortgage, carrying a legacy 3.94% rate, had an approved port lined up against a new purchase.
Mortgage balance at maturity
$268,000
21 years remaining amortization
Legacy rate the port would have carried
3.94%
Approved, pending the new purchase's closing
Current plain-renewal rate
5.45%
No port, no purchase involved
Combined income
$8,600/month
The problem
A home-inspection dispute on the new property -- not a financing failure on either side -- led both parties to sign a mutual release, cancelling that purchase cleanly and returning the deposit. The lender's own port approval had been conditional on that same purchase actually closing.
What the mutual release actually settled, and what it didn't
- ▸The mutual release cleanly ended the purchase dispute, with the deposit returned and no ongoing claim between the parties
- ▸It said nothing about, and could not revive, the lender's own conditional approval of the port
- ▸With no purchase left to port the existing mortgage into, the port lapsed along with the deal it depended on
The real estate dispute itself was resolved cleanly and fairly. The mortgage consequence of losing the purchase it was tied to was a separate problem entirely.
The numbers
Once it was clear there was nothing left to port into, the only question left was exactly what a plain renewal would cost against the port that was lost.
| The ported rate against the plain renewal | Amount |
|---|---|
| Payment at the 3.94% legacy rate (the lost port) | $1,561/mo |
| Payment at the 5.45% plain-renewal rate | $1,779/mo |
| Total debt service, plain renewal | Figure |
|---|---|
| Payment at 5.45%, 21 years remaining | $1,779/mo |
| Property tax + heat | $440/mo |
| Car loan | $255/mo |
| Total debt service | 28.8% |
28.8% leaves comfortable room on the plain renewal regardless -- this file was never at risk of not qualifying, consistent with what Canadian mortgage renewal statistics show for a household this size. The real number is the $218/month gap between the two rates on an identical balance and amortization, attributable entirely to the collapsed purchase.
The solution
A submortgage broker registered under BC's Mortgage Brokers Act priced out the plain-renewal alternative in real numbers rather than letting the household assume the port could simply be revived later.
First, confirmed with the lender, in writing, exactly how long the port approval's own window stayed open in case a replacement purchase was found in time.
Second, priced out the plain-renewal alternative at the lender's current rate, so the household could see the actual monthly cost of the port lapsing rather than a vague sense of losing a good deal.
Third, presented both paths -- wait out the port window on the chance of a new purchase, or renew plainly now -- with the real numbers behind each, rather than defaulting to whichever the lender's system did automatically.
The outcome
The mortgage renewed plainly at 5.45%, with total debt service at 28.8% -- the mutual release protected the household from a real estate dispute cleanly, but the cost of the lost port is a genuine, ongoing monthly figure, not a one-time inconvenience.
Because this is a plain renewal with no increase in balance or amortization, CMHC's ratio maximums do not apply directly; the 28.8% figure is informational, showing how much room the file had regardless of which rate applied.
What to take from this file
- 01A mutual release settles the real estate dispute. It does not revive a lender's conditional approval of a port that depended on the cancelled purchase. Treat the two as entirely separate questions.
- 02A port is only as good as the purchase it is tied to. If that purchase collapses for any reason -- financing, inspection, or otherwise -- the port itself has nothing left to attach to.
- 03Price out the plain-renewal alternative in real dollars before assuming a lost port is easily replaced. The gap between a years-old legacy rate and a current renewal rate is often a genuine, ongoing monthly cost.
- 04Ask the lender in writing exactly how long a conditionally-approved port stays open without a purchase. Each lender sets its own policy, and it is not something to assume.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸3.94% / 5.45% rates — rates move daily; neither is a quote -- the gap between a years-old legacy rate and a current renewal rate varies by origination date.
- ▸the port approval's own remaining window — each lender sets its own policy for how long a conditionally-approved port stays open without a purchase; there is no universal rule.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.