If you’re a homeowner, you’ve likely considered transferring or switching your mortgage at some point. A new job opportunity, more kids, kids moving out…our mortgage needs rarely keep up with the needs of life.
Transferring or switching your mortgage can also be a great option for those who want to save money on their monthly payments or reduce their interest rate. However, there are several things you need to know before making the decision to transfer or switch your mortgage.
What To Know About Transferring Your Mortgage
Transferring your mortgage in Canada can be a complex process that requires careful consideration, planning, and help from a mortgage expert. The name is slightly misleading since we’re still changing the terms of your current mortgage for a different one.
You’ll need to know the terms of the new mortgage, including the new interest rate and payment schedule, and the fees and charges associated with the transfer of your existing mortgage.
These fees may include legal fees, appraisal fees, and other administrative costs. It is important to factor these costs into your budget when considering a mortgage transfer.
Not all mortgages are transferable. This is why working with a mortgage broker is going to reduce that headache you already have from thinking about researching new mortgages…
Can You Switch Your Mortgage To Another Bank Or Lender?
In Canada, it is possible to transfer your mortgage to another bank or lender through a process known as mortgage transfer. This allows you to move your existing mortgage from one lender to another, often in search of better terms or rates.
However, there may be penalties or fees associated with transferring your mortgage to a new lender, such as prepayment charges or administrative fees. There is a bit of timing involved with transferring your mortgage to reduce your fees, especially in fixed-rate mortgage products.
Can You Transfer Your Mortgage From One House To Another?
It’s possible to transfer your mortgage from one house to another through a process known as mortgage porting. Mortgage porting allows you to transfer the terms and conditions of your existing mortgage to a new property without penalty, as long as certain conditions are met.
These conditions may include ensuring that the new property is of equal or greater value than the original property, and that you can demonstrate your ability to continue making mortgage payments on the new property. Another condition is you’ve sold your existing property and the “port” will be applied to your new property.
It is important to carefully review the terms and conditions of your existing mortgage and the new mortgage before transferring your mortgage to a new property.
Pros and Cons of Transferring Your Mortgage
Transferring your mortgage can be a big decision, but it also has its perks. On the one hand, you could snag a lower interest rate, flexible payment options, and better customer service.
Of course, there are always potential downsides to transferring your mortgage. For example, you could end up with a lender that doesn’t meet your needs as you had hoped or the interest rate plan you had doesn’t work out.
Transferring your mortgage can be done with little to no cost depending on the province you live in, and certain circumstances.
Tips For Transferring Your Mortgage
Here are some top tips to make the mortgage transfer or switch process go smoothly.
Plan Ahead: Don't wait until the last minute to start thinking about transferring your mortgage. Give yourself plenty of time to research and compare options, and to gather all the necessary paperwork.
Work with a Broker: Working with a broker like myself is going to make this process so much easier. I’ll be your professional mortgage shopper, your negotiator, and your fine print translator.
Don't be Afraid to Negotiate: If you are working with your lender directly, don’t be afraid to negotiate. You might be surprised at how much power you have to negotiate with lenders. Don't be afraid to ask for better rates or terms, or to negotiate fees and charges.
Read the Fine Print: Make sure you read and understand all the terms and conditions of your new mortgage before signing on the dotted line. Don't be afraid to ask questions or seek clarification if anything is unclear.
Transferring or switching your mortgage is a big decision, but with proper planning and preparation, you can make the transfer smooth.
Reach out if you’re interested in transferring or switching your mortgage.