Canada Mortgage Portability 2027: How to Transfer Your Rate to a New Home

Mortgage portability is a feature that allows you to transfer your existing mortgage — including its current interest rate, remaining term, and outstanding balance — to a new property when you sell your current home and purchase another. Without portability, selling your home before your mortgage term expires would trigger a prepayment penalty (often three months' interest for variable-rate mortgages, or the greater of three months' interest or the Interest Rate Differential (IRD) for fixed-rate mortgages). Portability eliminates or reduces this penalty if the transaction closes within the lender's portability window (typically 30–120 days). Full explanation at CMHC's mortgage types overview.

The mechanics: (1) You list your current home and accept an offer. (2) You find a new home and submit a portability request to your lender simultaneously or shortly after. (3) The lender assesses whether the new property qualifies under their underwriting criteria (you must re-qualify at the stress test rate, even for portability). (4) If approved, your existing mortgage is ported to the new property. (5) If the new home costs more than your current mortgage balance, the lender offers a "blend" — you take additional financing at today's current rate, blended with your existing rate. The blended rate sits between your existing (lower) rate and the current market rate. See how this interacts with renewal strategy in the Canadian mortgage renewal guide.

A blend-and-extend occurs when you port your mortgage and borrow additional funds at the same time. The lender blends the old and new rates into a single blended rate and extends the term back to a full term length (e.g., 5 years). Example: you owe $300,000 at 3.50% with 2 years left. You need $100,000 more for your new home. Current rates are 5.50%. Blended rate on $400,000 = approximately (3.50% × $300k + 5.50% × $100k) ÷ $400k = 3.875%. Term is extended to 5 years at 3.875% — better than fully breaking the mortgage and paying a large IRD penalty plus 5.50% on the full balance. Use the Canadian mortgage calculator to model blended payment scenarios.

Key limitations: (1) Time window: Most lenders require the sale and new purchase to close within 30–120 days of each other — a mismatch triggers the full prepayment penalty. (2) Re-qualification required: Even for portability, you must pass the OSFI B-20 stress test at the higher of your contract rate +2% or 5.25%. If your financial situation has changed (lower income, higher debt), portability may be denied. (3) Same lender only: You cannot port a mortgage to a different lender — portability is lender-specific. (4) Property type restrictions: The new property must meet the lender's eligibility criteria (e.g., some lenders won't allow porting to a rental property). (5) Not all products are portable: Variable-rate, HELOC, or certain specialty products may explicitly exclude portability. See the mortgage portability glossary entry for definitions.

It depends on the size of the IRD penalty and the rate difference: (1) If your existing rate is significantly below current rates, porting saves the penalty AND keeps a below-market rate — high value. (2) If your existing rate is close to or above current rates, the IRD penalty may be modest, and a full new mortgage at a lower rate may be better over the remaining term. (3) For variable-rate mortgages, the penalty is only 3 months' interest (typically small) — breaking and getting a new variable or fixed rate may be simpler. Calculate the IRD penalty first: major bank calculators are available on each bank's website. The Canada mortgage renewal shock guide explains the penalty math in detail.

If your current mortgage is CMHC-insured and you port it, you carry forward the existing insurance. However, if your new property purchase price is higher and you need additional funds, the additional borrowing may require a new or top-up insurance premium if the blended LTV remains above 80%. Key point: if the new property costs less and you pay down the balance, you cannot "reclaim" the paid insurance premium. Conversely, if you break the mortgage completely and start fresh, you would pay a new CMHC premium on the full new insured amount — another reason portability can be advantageous for insured borrowers. The CMHC insurance changes guide covers the 2027 premium structure.