The Truth About Portable Mortgages

by Alexis McKenzie 4C Florida Homes

The Truth About Portable Mortgages

When it comes to mortgages, there’s a lot more flexibility than many people realize. One of the lesser-known features in the world of home loans is the portable mortgage. But what exactly does it mean, and is it the right move for you? Will it be offered in the US?

Imagine you’re moving to a new home, but you love your current mortgage rate. A portable mortgage allows you to transfer your existing mortgage—and its terms—to your new property, saving you from breaking your contract and potentially paying costly penalties. Sounds simple, right? But as with most things in real estate, the devil is in the details.

How Does a Portable Mortgage Work?

Let’s say you bought your first home a few years ago when rates were low. Now, life’s changed and you’re ready to move, but rates have climbed. Instead of closing your old mortgage and starting a new one at a higher rate, a portable mortgage lets you bring your current rate and terms along for the ride. This can be a huge cost saver, especially in a rising interest rate environment.

Portability period: You typically have a short window—often 30 to 120 days—to complete the sale of your old home and the purchase of your new one.
Approval required: The lender will still need to approve the new property and may reassess your financial situation.
Top-ups: If your new home costs more and you need a bigger loan, you might have to blend your old rate with the new one, resulting in a blended mortgage rate.

Is a Portable Mortgage Right for You?

Portable mortgages aren’t for everyone and are not currently offered in the US. They are however offered in CA where the most common form of loan is an short term fixed rate usually 3-5 years more like an ARM. If it gets approved for the US market it will be on loans moving forward that may be structured differently and it most likely will not be a retroactive feature for those with low rates from the past few years.

It’s also important to read the fine print. Some lenders will have strict requirements about the type of property you can move to, how long you have to transfer the mortgage, and even what happens if you want to increase your loan amount.