In short
Often, yes. If you sell to buy again, a portable mortgage lets you take your balance, rate and terms to the new property, which can avoid the prepayment penalty. If the buyer takes over your loan, it is an assumption: the lender must approve the buyer, and the option mostly exists for fixed-rate mortgages. Either way, eligibility depends on your contract: ask your lender about its restrictions and fees.
Two options that are not alike
Portability applies when you sell your property to buy another: your mortgage follows you, with its balance, rate and terms. Assumption applies to the buyer of your property: they take over your loan and your property, on the same terms.
| Portability | Assumption | |
|---|---|---|
| Who keeps the loan | You, on the new property | The buyer of your property |
| What stays the same | Balance, rate and terms | The terms of the original loan |
| Key condition | Your loan must be eligible; the lender sets its restrictions | The lender must approve the buyer |
| Loan types | Depends on the contract | Mostly fixed rates; not variable rates or HELOCs |
| Possible fees | A penalty if the new home costs less than the balance | An assumption fee charged by some lenders |
Source: Financial Consumer Agency of Canada (FCAC), “Choosing a mortgage that is right for you”.
What it can cost
Porting is not always free. According to FCAC, if your new home costs less than the amount of your mortgage, you may pay a prepayment penalty on the difference. If porting is not possible and you break the contract, the usual penalty is the higher of three months' interest on the balance or the interest rate differential (IRD), and an administration fee may be added. The mortgage penalty guide explains both calculations.
On the assumption side, some lenders charge a fee to take over the loan. And watch out as a seller: in some provinces, the seller may remain personally liable for the mortgage after the sale. Before agreeing, ask the lender whether it releases you once the buyer is approved.
If your mortgage is insured by CMHC
CMHC mortgage loan insurance follows the ported loan. If the new loan is larger, only the premium difference is added. The premium already paid is partly credited, depending on the time elapsed since the original loan closed:
| Time since the original loan closed | Credit on the premium already paid |
|---|---|
| 6 months or less | 100% |
| 12 months or less | 50% |
| 24 months or less | 25% |
| More than 2 years | The insurance stays portable, with no credit |
CMHC conditions: the insurance request must be received within 6 months of the original property's closing date; the original loan must be in good standing; the new property must have the same intended use (owner-occupied or rental); portability is not available where an insured mortgage was assumed. Source: CMHC, “Portability” fact sheet and page.
The questions to ask your lender
- Does my contract allow portability, and with what restrictions?
- How long do I have to buy the new property after the sale?
- If I need a larger amount, how do you set the rate on the added part?
- If the new property costs less, what penalty will I pay on the difference?
- For an assumption: what fees, and do you release me from all liability once the buyer is approved?
A mortgage broker can compare the cost of porting with a new loan elsewhere, penalty included.
Frequently asked questions
What is a portable mortgage?
It is a mortgage you can take with you when you sell your property to buy another: the balance, rate and terms move to the new property. Your lender says whether your contract is eligible and on what conditions.
Can a buyer take over my variable-rate mortgage?
Generally not. According to FCAC, assumption is available on most fixed-rate mortgages, but not on variable-rate mortgages or home equity lines of credit.
What happens if my new home costs less than my balance?
You may pay a prepayment penalty on the difference, since that part of the loan is repaid before the end of the term.
Does my CMHC insurance follow the transfer?
Yes. The premium already paid is credited 100% within 6 months, 50% within 12 months and 25% within 24 months; after two years, the insurance stays portable with no credit. The request must come within 6 months of the original property’s closing.
Sources
- ACFC — Choisir la bonne hypothèque (transférable, prise en charge) read 2026-10-08
- FCAC — Choosing a mortgage that is right for you read 2026-10-08
- ACFC — Frais hypothécaires : pénalités de remboursement anticipé read 2026-10-08
- SCHL — Transférabilité (assurance prêt hypothécaire) read 2026-10-08
- CMHC — Portability fact sheet (premium credit) read 2026-10-08
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Updated
General information, not financial advice. For your situation, consult a mortgage broker or your institution.