Porting vs. breaking a mortgage: what actually happens when a client moves.

A portability clause is the contractual right to move an existing mortgage — its rate, remaining balance, and remaining term — to a new property, with the same lender. It only works with that lender; there's no such thing as porting to a different institution.

If a client wants a different lender for the new property, the existing mortgage has to be broken first, with whatever penalty applies, before the new lender's mortgage can be put in place.

Under the federal Code of Conduct on mortgage prepayment disclosure, lenders must clearly explain their penalty calculation before a borrower signs. In practice, that's typically three months' interest on a variable-rate mortgage, or the greater of three months' interest and the interest rate differential (IRD) on a fixed-rate mortgage — see our companion piece on fixed vs. variable mortgages for why that asymmetry exists.

The IRD calculation is what makes breaking a fixed mortgage unpredictable without running the actual numbers — it depends on the remaining term and how far current rates have moved from the client's contract rate, not a flat formula a client can estimate on their own.

An insured mortgage's default insurance is tied to the loan and can transfer with a port, but the insurer — CMHC, Sagen, or Canada Guaranty — still has to re-approve the new property under its own eligibility guidelines. It isn't an automatic carry-over.

If the client needs additional borrowing on top of the ported amount for the new property, that top-up portion may require its own insurance premium calculation, on top of whatever was already in place on the original loan.

A blend-and-extend combines a client's existing contract rate with the lender's current rate, weighted by the remaining term, into a new rate applied over an extended term — without triggering the prepayment penalty a straight break would. It's one of the options lenders are required to disclose clearly under the federal prepayment disclosure rules.

It won't always beat porting or a straight break on total cost, but for a client who isn't moving to a new property at all — just refinancing in place, or extending a term early to access a better rate — it's worth running the comparison before assuming a full break is necessary.

Check the portability clause and its timing window first — most ports have to close within a set number of days of the sale, and missing that window can force a break by default. Then compare the actual total cost of porting, blending, or breaking-and-switching, not just the headline penalty number.

That comparison is exactly the kind of file math that's easy to rush under a moving client's timeline — support from Treadstone's fulfillment associates keeps that comparison from getting shortcut under deadline pressure.