Deciding whether to port your mortgage or get a new one depends on various factors such as your current mortgage terms, the terms of the new mortgage, your financial situation, your timeframe and your long-term plans. Here are some considerations to help you make your decision:
PORTING YOUR MORTGAGE
Interest rate: If your current mortgage has a lower interest rate than what is currently available, porting it might be beneficial, as you can keep the favorable rate.
Penalties: Check if there are any penalties or fees associated with porting your mortgage. Sometimes, the penalties can negate the benefits of porting.
Terms and conditions: Review the terms and conditions of your current mortgage to ensure they still align with your needs and financial situation.
Time frame: Be clear about what information you need from your current lender to feel confident that you will be able to remove your subject to finance and feel secure. Sometimes banks have administrative delays that prevent home-owners from getting adequate documentation within their timeframe.
GETTING A NEW MORTGAGE
Current market rates: If interest rates have decreased since you took out your current mortgage, getting a new mortgage might allow you to secure a lower rate, potentially saving you money over the long term.
Flexibility: A new mortgage may offer more flexible terms or features that better suit your current financial situation or future plans. A mortgage broker can provide you OPTIONS to consider, ensuring you get the documentation you need when you need it.
Closing costs: Consider any closing costs associated with obtaining a new mortgage, as they can impact the overall cost-effectiveness of switching. Using a mortgage broker allows you to lean on them to account for all costs involved and weigh the pros and cons of all options.
Financial situation: Consider your current financial situation, including your income, expenses, and overall financial goals. Choose the option that aligns best with your financial objectives and ability to manage mortgage payments. It’s much more important that the payments be feasible for your circumstance than focusing on the interest rate. Remember, your interest rate is temporary!
Long-term plans: Evaluate your long-term plans, such as how long you intend to stay in your current home and whether you anticipate any major life changes (such as job relocation or growing family needs) that could impact your housing situation.
Timeframe: It is absolutely crucial to know your deadline dates. Ensure your mortgage broker gets all those dates as soon as possible so they can put your file together, talk to lenders and present all options so you have some time to consider them and make an educated decision. Also make sure you have accounted for your deposit funds and will be able to access them when needed, and that you’ve factored all closing costs into the transaction.
Porting your mortgage should be easy – but that’s not always the case! In the last three months, I have had two clients come to me asking for help because they wanted to port their mortgages but weren’t feeling confident about the transaction and the support they were getting from their banks…. One client had just renewed his mortgage just under a year ago and specifically went with the lender he did because he was able to get a line of credit for a future deposit and he was assured he could port his mortgage when he was ready to upsize his home for his growing family. Given the timeframes involved, both clients decided to switch to a new lender, even if the rate was slightly higher, because they could sleep at night knowing with certainty what the terms of the mortgage would be and that the financing would be in place when they needed it.
Ultimately, whether to port or switch lenders is a personal decision for you – – but it’s wise to ask for help from professionals so you KNOW with certainty that you are considering all feasible options for your circumstance and that you will absolutely have what you need when you need it.