This article is for informational purposes only and does not constitute financial advice. Speak with a licensed mortgage professional before making any mortgage decisions.
— Quick answer for movers
- When you move in Canada you have three core options for your existing mortgage: port it to the new property, break it and pay a prepayment penalty, or in rare cases let the buyer assume it.
- Porting keeps your current rate, balance and remaining term but requires staying with the same lender, re-qualifying under the OSFI B-20 stress test, and closing both transactions inside the lender’s window — typically 30 to 120 days.
- Breaking the mortgage frees you to switch lenders and shop rates, but you pay a prepayment penalty calculated as the greater of three months’ interest or an interest-rate-differential (IRD) charge on a fixed term.
- If your new home costs more, the extra money is borrowed at today’s rate and combined with your existing rate in a blended (port-and-increase) calculation; if it costs less, you may avoid a penalty using your annual prepayment privileges.
- Bridge financing covers the gap when your purchase closes before your sale, and is generally available once you have a firm, unconditional sale on your existing home.
— Why the 2026 renewal wave makes this question urgent
Roughly 1.8 million Canadian mortgages are coming up for renewal around mid-2026, and most were signed during the 2020 to 2022 window when rates sat at multi-decade lows. If you locked a sub-3% rate then and you are now thinking about moving, you have a real reason to be careful — the wrong move can cost you that rate.
Here is the reassurance: most movers do not lose their rate. Lenders build moving into the mortgage contract through a feature called the portability clause, which lets you carry your existing rate to a new property. The rules are strict, the timeline is tight, and a few specific mistakes can quietly wipe out the savings.
This guide walks through every path so you can pick the right one before you list.
— Pick your path
— What actually happens to your mortgage when you move
A mortgage is legally tied to a specific property, not to you. When you sell, your lender registers a discharge — the legal release of their claim against the title — and the mortgage as it stood ends on closing day. What happens next depends on which path your contract allows.
The most common path is porting. A portability clause is the contractual right to move your existing mortgage to a new property, taking your rate, remaining balance and remaining term with you. Our 2026 guide to porting a mortgage in Canada covers the mechanics in detail.
A port still triggers re-qualification under the OSFI B-20 stress test, meaning you may need to qualify at the greater of contract rate plus 2% or 5.25%, even though you are not changing lenders. Default-insured borrowers may also be able to carry forward an existing premium credit through CMHC, Sagen or Canada Guaranty, depending on the insurer.
Pegasus Mortgage Lending
Scenario router: what your situation usually means for your mortgage
Find the row closest to your move and read only the section that fits your situation.
| Your situation | Most likely path | Read this section |
|---|---|---|
| Upsizing to a more expensive home | Port-and-increase (blend-and-extend) | Three core options compared |
| Downsizing to a cheaper home | Port-and-decrease, using prepayment privileges | Three core options compared |
| Switching cities or provinces | Port if lender operates in both — otherwise break | Provincial and cross-province nuances |
| New purchase closes before old sale | Bridge financing on top of port or new mortgage | When the closing dates do not line up |
| Income or credit has changed since signing | Re-qualification risk — talk to a broker first | Step-by-step roadmap |
— Your three core options compared
Pegasus Mortgage Lending
Port vs. Break vs. Assume — side-by-side
Three accommodation paths a Canadian lender may offer when you move during your mortgage term.
| Option | Keep your rate? | Switch lenders? | Re-qualify? | Typical cost | When it is the best move |
|---|---|---|---|---|---|
| Port | Yes (rate + remaining term) | No — same lender only | Yes — under OSFI B-20 | Admin fee, typically $100–$300 | Your existing rate is materially lower than today’s rates |
| Break | No — repriced at today’s market | Yes — any lender | Yes — under OSFI B-20 | Penalty = the greater of three months’ interest or IRD (fixed term) | Today’s rates are materially lower, or your portability clause is too restrictive |
| Assume | Yes — buyer takes over | No — buyer joins your lender | Buyer qualifies; seller may have residual liability | Generally low direct cost to seller | Buyer wants your rate and your lender allows assumption (rare in 2026) |
Porting keeps your existing mortgage — same rate, same remaining term, often with a small admin fee — but you must stay with your current lender. Breaking ends your mortgage early, opens you up to any lender in Canada, but triggers a prepayment penalty. Our guide on how to avoid an expensive penalty for breaking your mortgage walks through the IRD math.
Assumption is rare in 2026 but worth knowing about. If your lender allows it, the buyer of your home may take over your mortgage at your existing rate and term. The buyer must qualify, and you may still carry residual liability.
— Step-by-step roadmap for a mid-term move
- 1Talk to a broker before you list.The math on port versus break depends on contract details most homeowners have not looked at since signing. Run the numbers before you commit to a listing price or a closing date. Our guide on selling your home before your mortgage term ends goes deeper.
- 2Confirm your portability clause.Pull your mortgage commitment letter and check three things: that the mortgage is portable, the porting window (typically 30 to 120 days), and any restrictions on property type or location.
- 3Re-qualify under today’s rules.Your income, credit and the new property are reassessed under OSFI B-20 at the greater of contract rate plus 2% or 5.25%. If anything has changed since you signed — a job switch, a new car loan, a credit hit — flag it early.
- 4Coordinate the two closings.Sale and purchase should both fall inside the lender’s porting window. Build a buffer if you can.
- 5Plan for the gap.If the new home closes first, line up bridge financing in advance.
- 6Register the new charge.On closing day the existing charge is discharged and the new charge registers. In Quebec, both steps require a notary.
— When the closing dates do not line up: bridge financing
Pegasus Mortgage Lending
Illustrative bridge-financing cost by overlap window
Daily interest on a $500,000 bridge balance plus a one-time lender setup fee. Figures are illustrative — not a rate quote.
Typical 30-day all-in
~$2,895
$2,520 interest + $375 setup
Prerequisite
Firm sale required
Unconditional accepted offer on existing home
Closing dates rarely cooperate. If your purchase closes a week — or a month — before your sale, you need somewhere to find the down payment that is still tied up in your old home. Bridge financing fills that gap.
Most lenders price bridge loans at a higher rate than your regular mortgage, charged daily on the overlap balance, plus a setup fee that may range from roughly $250 to $500. The loan is repaid in full from your sale proceeds. Use our mortgage payment calculator to model the all-in cost.
— Provincial and cross-province nuances
Where you move matters as much as how you move. Ontario charges a provincial land transfer tax and the City of Toronto layers a municipal one on top. British Columbia charges a Property Transfer Tax. Alberta charges only registration fees, with no land transfer tax. Use the land transfer tax calculator to estimate the bill before you finalize an offer.
In Quebec, a notary is legally required to handle both the discharge of your existing charge and the registration of the new charge. Cross-province moves can quietly disqualify a port: a lender can only carry your mortgage to a new property in a province where they operate.
— Common mistakes movers make
A few avoidable mistakes account for most of the money lost on mid-term moves. The list below covers the failure modes Pegasus brokers see most often. The prepayment penalty calculator is the first tool to use before any decision.
- •Listing your home before talking to a broker. Once you have an accepted offer, your timeline is locked. Run the port-versus-break math first.
- •Assuming your mortgage is portable. Many variable-rate, restricted and no-frills products are not portable. Pull your contract and confirm before you list.
- •Missing the porting window. Lenders typically allow 30 to 120 days between sale and new purchase. Miss it and the port lapses entirely.
- •Downsizing past the prepayment privilege. Paying down more than your annual privilege (often around 15 to 20%) can trigger a partial penalty on the excess.
- •Forgetting that a port still triggers re-qualification. Your file is reassessed under OSFI B-20 at the greater of contract rate plus 2% or 5.25%.
- •Assuming mortgage life insurance moves with you. It generally does not. You may need to reapply, and your health since signing can affect approval.
- •Treating bridge financing as automatic. A bridge loan generally requires a firm, unconditional sale on your existing home.
Pegasus Mortgage Lending
Illustrative cost of the five most common mover mistakes
Approximate midpoint costs in Canadian dollars from Pegasus client casework. Actual cost depends on your contract and market conditions.
Worst mistake
~$12,500
Breaking when porting was the cheaper move
Avoidable how
Run the math before listing
A 20-minute broker conversation often pays for itself many times over
— Why an independent broker matters here
Complex files — cross-province moves, self-employed borrowers, bridge financing on top of a port, or downsizing past prepayment privileges — are where broker advice pays for itself. At Pegasus, that means more than fifty lenders, including banks, credit unions, trust companies and alternative lenders, plus access to broker-only products that retail customers never see. Razi Khan, Founder and Mortgage Broker at Pegasus has worked through every variation of this scenario since 2008. Working with a broker costs you nothing — the lender pays the broker on completion.
— Frequently asked questions
What actually happens to my mortgage when I sell my house in Canada?
The existing charge against the property is discharged on closing day, ending the mortgage. You then either port your existing mortgage to the new home, break it and pay a prepayment penalty, or pass it to the buyer through an assumption if your lender allows it.
Can I take my low mortgage rate with me to a new home?
In most cases, yes — through a feature called porting. Your existing rate, remaining balance and remaining term carry across to the new property. You generally must stay with the same lender and re-qualify under current lending rules.
Is it cheaper to port my mortgage or break it and pay the penalty?
Porting is typically cheaper when your existing rate is meaningfully lower than today’s rates. Breaking can be cheaper when today’s rates are meaningfully lower, since the up-front penalty may be recovered through years of payments at a lower rate.
Do I have to requalify if I just port my existing mortgage?
Yes. A port is treated like a new application. The lender reassesses your income, credit and the new property under the OSFI B-20 stress test, which requires you to qualify at the greater of contract rate plus 2% or 5.25%.
How does bridge financing work in Canada when my new place closes first?
Bridge financing is a short-term loan secured against your existing home’s equity. It covers the down payment gap until your sale closes. It typically requires a firm, unconditional sale agreement and charges daily interest plus a one-time setup fee on the overlap balance.
Can I move my mortgage to a different province?
Often yes, but only if your lender operates in the new province. Some smaller lenders are regional. A cross-province port also re-qualifies you under current rules and may involve different land transfer tax rules or notarial requirements in Quebec.
What happens if I cannot find a new home in time to port?
If you sell but cannot close on a new purchase inside the lender’s window — typically 30 to 120 days — the port lapses. Your mortgage is discharged from sale proceeds and any prepayment penalty is deducted from the payout.
Run the math before you list.
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About the author
Razi Khan
Founder, CEO & Licensed Mortgage Broker · Pegasus Mortgage Lending · Toronto, Ontario · FSRA Lic # 11479
Razi Khan is the Founder, CEO, and a licensed Mortgage Broker at Pegasus Mortgage Lending Center Inc., based in Toronto. With over 20 years of experience in the Canadian mortgage industry, Razi has personally guided more than 3,000 clients through some of the most complex and high-stakes financial decisions of their lives — from first-time purchases in the GTA to refinancing strategies, alternative lending solutions, and cross-border mortgages for Canadians buying in the United States.
Razi founded Pegasus in October 2008, launching the brokerage at the height of a global financial crisis. He works across the full spectrum of borrower profiles, with particular expertise in complex files including self-employed borrowers, credit-challenged clients, and investors building multi-property portfolios.
Learn more about Razi Khan →Sources & references
- Financial Consumer Agency of Canada — Mortgages overview — https://www.canada.ca/en/financial-consumer-agency/services/mortgages.html
- FCAC — Mortgage prepayment charges — https://www.canada.ca/en/financial-consumer-agency/services/mortgages/mortgage-prepayment-charges.html
- FCAC — Types of mortgages — https://www.canada.ca/en/financial-consumer-agency/services/mortgages/types-mortgages.html
- OSFI — Guideline B-20 (Residential Mortgage Underwriting Practices and Procedures) — https://www.osfi-bsif.canada.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-b-20
- CMHC — Mortgage default insurance — https://www.cmhc-schl.gc.ca/consumers/home-buying/mortgage-loan-insurance-for-consumers
- Pegasus Lending — 2026 porting rules guide — https://pegasuslending.com/blog/can-you-port-a-mortgage-in-canada-2026-rules-explained/