Porting lets a borrower move their existing mortgage — its interest rate, remaining term, remaining amortization and outstanding balance — to a new property, without paying the prepayment penalty that would otherwise apply to discharging it early. This is generally only available when the new property is financed with the same lender, since the whole point is continuing the existing contract rather than starting a new one; it isn't a feature that follows a borrower to a different lender.
In the cleanest version, the sale of the old property and the purchase of the new one close on or near the same date, and the exact existing balance moves across dollar for dollar, with the rate, remaining term and remaining amortization all carrying forward unchanged. No penalty applies, and no new underwriting decision about the rate is needed, because nothing about the loan itself has actually changed — only the collateral behind it.
Most moves aren't dollar-for-dollar — a client buying a more expensive property typically needs more money than the ported balance covers. In that case, the lender treats the file as two pieces: the original ported balance keeps its original rate, and the new incremental amount needed is priced at today's rate, usually alongside extending to a new full term. The two rates are then combined into a single blended rate, weighted by each piece's share of the new total balance.
A simplified worked example: a $300,000 ported balance at a 3.00% original rate, topped up with $200,000 in new money at a 6.00% current rate, for a new $500,000 total. The blended rate is roughly (300,000 × 3.00% + 200,000 × 6.00%) ÷ 500,000 = (9,000 + 12,000) ÷ 500,000 = 4.20%. The client ends up with a single new rate on the combined balance that sits between their old rate and today's rate, rather than paying today's full rate on the entire amount.
The reverse situation — a client moving to a less expensive property who needs a smaller mortgage than the one they're porting — has more than one possible path, and which ones are available depends on the lender and product. A client can generally use any available prepayment privilege room, covered in Module 05, to shrink the balance penalty-free before the port. Beyond that, a partial penalty, calculated on whatever difference remains, using the same IRD-or-three-months formula from Module 01, is the standard fallback. Some lenders offer an alternative worth asking about directly: rather than charging a cash penalty on the unused portion, they absorb it into a modestly higher blended rate on the reduced balance for the remainder of the term. This isn't a universal feature, and it shouldn't be promised to a client without confirming it's actually available on their specific lender and product — but it's worth asking about explicitly rather than assuming a cash penalty is the only option.
Porting generally requires the sale of the old property and the purchase of the new one to happen within a window set by the lender; miss that window and the port typically collapses into an ordinary discharge of the old mortgage — penalty included — followed by a fresh mortgage on the new property. That timing risk deserves to be flagged early in any move that depends on porting to avoid a penalty.
Porting also isn't automatically the right economic choice just because it avoids a penalty. If the client's existing rate is well above what's currently available in the market, blending an above-market rate forward, even penalty-free, can leave them worse off over the new term than paying the penalty and starting fresh at today's better rate would. The broker's job on every port decision is to actually run both numbers — the true cost of porting versus the true cost of breaking and starting over — rather than assuming that avoiding a penalty is automatically the better outcome.
A client's existing mortgage rate, from several years ago, is now noticeably higher than today's available rates. They're moving to a new home with the same lender and could port to avoid the penalty. Is porting automatically the right call?
Avoiding the penalty isn't the same thing as getting the best overall outcome — if the existing rate is well above what's currently available, blending it forward can cost more over the life of the new term than paying the penalty once and starting fresh at today's rate would. Porting is genuinely available between properties with the same lender, which is exactly the scenario described here, so the real decision comes down to running both numbers rather than treating penalty avoidance as the only variable that matters. Whether the new property costs more or less changes the mechanics of topping up versus porting down, but it doesn't answer the underlying question of which path is actually cheaper.
Lender policies change without notice. Confirm current guidelines directly with the lender or insurer before relying on them for a live file.
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