Is it time for an upgrade? Does your family need more room to grow? With interest rates still hovering at historic lows, your dream home may be more affordable than you think!
When you are ready to sell your home and buy a new one, your first move should be to look into your mortgage options. If you will need a bigger mortgage, your options will include bringing your mortgage with you if it is portable. You can often "blend" your current mortgage rate with the mortgage rate on the additional funds you need.
Our team can provide a professional mortgage analysis to determine what you can afford at no cost or obligation. So let's get started!
What are Your Options?
Option 1 - Transfer Your Mortgage
If you have an existing mortgage on your current home it is likely locked into some sort of term. The likelihood that you will time your move in conjunction with your mortgage coming up for renewal are rare, so what are your options? Most mortgages can be transferred or ported from one property to another. There are three main scenarios that we will run into:
Straight Port - The existing mortgage balance and terms and conditions are transferred to the new property. No changes are made to the mortgage and no additional money was required for this new purchase.
Increase - You purchase a property of greater value and require a larger mortgage. The mortgage balance is increased as the existing funds and the new funds are combined and ported to the new property. The resulting interest rate in the new mortgage will be calculated based on a blending of the existing and the new interest rates. This is called "Blend and Increase".
Decrease - The existing mortgage balance is reduced and transferred from existing property to a new property of lower value. No penalty is required on the reduction itself if the reduction is within the unused privilege payment allowances for the mortgage. (This can range from 10-25% per year) A penalty is required on any reduction that exceeds any privilege payment allowance.
Option 2 - New Mortgage
In many cases it can make sense to simply break your existing mortgage and set up a completely new mortgage for your new purchase. Today’s interest rates remain at historical lows so you can take advantage of a new rate on your new mortgage. When you break your current mortgage, your lender will charge a penalty. Our mortgage brokers will take into account the size of the penalty compared to your savings with a new lower rate. This will determine the best option for you!
Let's Get Started!
Our mortgage team is here to assit you in making the best financial decision for you and your family. If you would like to get pre-approved for your next purchase simply complete the mortgage application on our website or contact one of our brokers to discuss your options!