When buying a new home in Saskatchewan, the process can be complex. However, understanding mortgage portability can simplify the transition for homeowners selling their current property and purchasing a new one. Mortgage portability allows the transfer of an existing mortgage to a new property, offering flexibility and potential cost savings.
Today, we’ll explore the benefits and details of mortgage portability for homeowners.
What is Mortgage Portability?
Mortgage portability is a feature offered by many lenders that enables homeowners to transfer their current mortgage terms, including the interest rate and remaining balance, to a new property.
This option is particularly beneficial if you still have a significant term remaining on your mortgage and want to avoid penalties associated with breaking your existing mortgage contract.
Advantages of Mortgage Portability
- Interest Rate Continuity: By porting your mortgage, you can maintain your existing interest rate, even if market rates have increased since you obtained your original mortgage.
- Cost Savings: Porting your mortgage can help you avoid prepayment penalties that would be incurred if you were to break your mortgage early.
- Flexibility in Moving: Mortgage portability provides flexibility when it comes to selling your current home and purchasing a new one.
Factors to Consider
While mortgage portability offers numerous benefits, consider certain factors before deciding to utilize this option:
- Eligibility: Not all mortgages are portable. Each lender may have specific eligibility criteria. Discuss portability options with your mortgage broker or lender to ensure your mortgage is portable and meets the necessary requirements.
- Property Assessment: The new property you wish to purchase must be acceptable to your current lender, as they will need to assess its value and approve the transfer of the mortgage.
- Potential Changes: Keep in mind that porting your mortgage doesn’t guarantee you can maintain the same mortgage amount. If you require additional funds for the new property, you may need to renegotiate or apply for a new mortgage to cover the difference.
Conclusion: Mortgage Portability in Saskatchewan
Mortgage portability lets homeowners transfer their mortgage terms to a new property, offering cost savings and flexibility. Want to learn more about this option? Call City Centre Mortgages today!