What is a Portable Mortgage?

Portable mortgages allow a borrower to transfer an existing mortgage on a home to another home that they wish to purchase. With a portable mortgage, the borrower can negotiate the price of their home and the purchase price of another without the worry of a new mortgage. The terms and conditions of the old loan carry-over to the new mortgage.

A portable mortgage is ideal for borrowers who have a periodic desire to upgrade their home. A portable mortgage does not have to be paid off when the old home is sold, it simply transfers to the new mortgage. The terms, conditions and rates of the old mortgage apply to the new mortgage. This can be particularly helpful if the borrower obtained the original loan a lower interest rate.

An important advantage of a portable mortgage is that it can eliminate loan fees and other costs associated with establishing a new loan. There is no prepayment associated with the transfer of the loan and the borrower has the ability to take advantage of lower interest rates without having to refinance the loan.