Mortgage Porting in Canada: How to Take Your Low Rate to a New Home Without the Penalty

Step 1: Understand what porting actually "moves"

Clients often picture porting as “moving the mortgage to a new house.” That’s half right. What porting moves isn’t the loan as a container — it’s the terms you negotiated when you signed:

• The rate. The low rate you locked in 2021 or 2022 carries over to the new home, untouched.
• The remaining term. If you’re two years into a five-year term, you typically carry those remaining two years (unless you do a port and increase that re-extends — see Step 3).
• The balance. The principal you currently owe.

The key logic is that porting means not breaking the mortgage. According to FCAC (Canada.ca), breaking a closed mortgage is what triggers a penalty; porting continues the same contract onto the new home, so the contract never breaks and no penalty arises. That’s exactly why anyone holding a below-market rate cares about it — once market rates climb, that old rate is itself a real, dollar-valued asset.

Step 2: The three hard prerequisites — same lender, the window, and re-qualifying

You can’t port simply because you want to. Three gates must all be cleared at once. Miss any one, and you’re left breaking the mortgage and paying the penalty.

• Same lender, always. Porting can only move your mortgage onto a new loan still funded by your original lender. If you want to switch banks on the purchase — say, because another lender’s rate is lower — that isn’t porting; it’s breaking your mortgage and starting a new one, penalty included.
• Within the lender’s window. Your sale and your purchase have to close within a set window — commonly 30 to 120 days, but the exact number varies by lender, so go by your contract and lender. The smoothest case is when both properties close on the same day. When there’s a gap, some lenders offer a “port and hold” arrangement to preserve your rate for a period — but not all do.
• You must re-qualify. This is the most overlooked condition: even with the same lender, you have to re-qualify under today’s income, credit, and debt standards, the new property has to meet the lender’s criteria, and you must pass the stress test — qualifying at your contract rate plus 2% or the benchmark rate, whichever is higher. So if your income dropped or your debt rose over the past few years, the rate may be yours but the port can still fail.

Step 3: Buying a pricier home — "port and increase" and the blended rate

In the GTA, a move-up almost always means a more expensive home, so the new property needs a larger loan than your current balance. That’s where “port and increase” — also called blend and extend — comes in: you carry your old mortgage and its low rate over, and borrow new money for the additional amount.

• The new portion is priced at today’s market rate. The extra borrowing comes at today’s rate, not your old low one.
• What you actually pay is a “blended rate.” It’s a weighted average of your old balance at your old rate and the new amount at the new rate. For example: port a $400,000 mortgage at 2.9%, add $200,000 of new money at roughly 5.5% today, and the blended rate on the full $600,000 lands somewhere around 3.8% (exact figures per your lender’s math).
• The term usually re-extends. A port and increase typically resets the whole mortgage into a new fixed term (often five years), so your remaining term changes too.

This is where porting’s real value shows up: instead of covering the whole loan at your old rate, you let the old rate drag down the blend, pulling it below what you’d pay borrowing the entire amount at today’s rate.

Step 4: When porting pays off — and when it backfires

Porting isn’t an automatic yes. The decision really comes down to one comparison: your old rate versus today’s market rate, and by how much.

• The classic win. Your old rate is well below today’s market rate — say you locked 2.9% in 2021–2022 and five-year rates today are 4.5%+. The old rate is valuable on its own, so porting both preserves it and avoids the break penalty. A double win.
• When to run the numbers again. If today’s market rate is already lower than your old rate, clinging to the old rate can cost you. Sometimes paying the penalty and re-doing the mortgage at today’s lower rate works out cheaper overall — but only the full math (penalty plus future interest) tells you that.
• Downsizing needs extra care. If the new home needs a smaller loan than your current balance, you’re effectively paying down principal — and that reduced amount may be treated as a prepayment and trigger a proportional penalty. Downsizing is not automatically penalty-free; ask first.

My practical advice to movers: run this math before you list. Your porting eligibility, the window, and the penalty comparison should all be settled before you make a buy/sell decision — not discovered after the offers are signed.

Porting rules are highly contract-specific — the same word, “porting,” can mean very different fine print at Bank A versus Bank B. Put these questions to your lender or mortgage broker before you list:

• Is my mortgage portable? (Most closed fixed-rate mortgages are, but confirm.)
• What’s your porting window — how many days? Must both deals close the same day, or is a gap allowed? Is there a “port and hold”?
• If I buy pricier, what rate applies to the new portion? How is the blended rate calculated? Does the term reset to a new five years?
• I’ll need to re-qualify — do I still pass the stress test under today’s rules? (Tell them upfront about any income or debt changes.)
• If I downsize, is there a proportional prepayment penalty?
• If I instead break and switch banks, what’s the exact penalty? (Have them quote the real “greater of three months’ interest vs. IRD” figure off your contract, then compare it against porting.)

Does porting a mortgage cost a prepayment penalty?

Usually not. Porting continues the same mortgage contract onto your new home, so you aren't breaking it — and breaking is what triggers the penalty. According to FCAC (Canada.ca), the penalty (the greater of three months' interest or the IRD) applies when you break a closed mortgage early. The catch is you must satisfy all three conditions — same lender, the timing window, and re-qualifying. Miss any one and you're left breaking the mortgage and paying.

My new home costs more — can I still port, and does the rate change?

Yes — it's called port and increase (or blend and extend). You carry your old mortgage and its low rate over, borrow the extra amount at today's market rate, and pay the weighted-average "blended rate" of the two. For example, $400,000 at 2.9% plus $200,000 at roughly 5.5% lands around 3.8% on the full $600,000 (per your lender's math). The whole mortgage usually resets into a new fixed term, often five years.

Do I have to stay with my original lender to port?

Yes. Porting can only move your mortgage onto a new loan still funded by your original lender. If you want to switch to a cheaper bank when you move, that isn't porting — it's breaking your old mortgage and starting a new one, which means paying the prepayment penalty. So before moving, compare: keeping your old low rate by porting versus paying the penalty to get a lower rate elsewhere.

Is there a deadline to port, and what happens if I miss it?

Yes. Most lenders require your sale and purchase to close within a set window — commonly 30–120 days, but the exact number varies by lender, so go by your contract. The smoothest case is both closing the same day; when there's a gap, some lenders offer a port and hold to preserve your rate temporarily, but not all do. Miss the window and you may lose the right to port, leaving you to break and pay the penalty.

If I downsize, will porting trigger a penalty?

It can. If the new home needs a smaller loan than your current balance, you're effectively paying down principal, and that reduced amount may be treated as a prepayment that triggers a proportional penalty. Downsizing is not automatically penalty-free — confirm exactly how much you're reducing and how it's calculated with your lender before you list.