08.17.2023 | Seller Resources

Can You Sell Your Home and Keep Your Low-Interest Rate?

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Picture this: you’ve scored a killer interest rate on your condo mortgage—3% to be exact—and there are another 2 years left on that deal. Now, you’re itching to upgrade to a more spacious home, but the mortgage rates have skyrocketed to 6%. Bummer, right? Is there a way to sell your current place and still retain some of that sweet, low-interest rate for your new purchase?

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First off, let us clear the air: we’re real estate agents, not mortgage advisors. But navigating the tricky waters of real estate transactions and mortgage intricacies is something we’ve become rather accustomed to. And while we might not have all the financial answers, we do know a few specialists who do—and we’d be thrilled to connect you with them.

That said, let’s dive deep into the concept of ‘porting’ your mortgage. If you’re envisioning some fancy banking trickery, it’s simpler than it sounds.

The Power of Porting

When you ‘port’ a mortgage, you’re essentially transferring the remaining balance of your current mortgage, its terms, and its interest rate to a new property without incurring any penalties. It’s like picking up your mortgage from your condo and placing it into your new home. Handy, isn’t it?

Let’s illustrate with real numbers:

Suppose your chic Toronto condo still has a $300,000 mortgage balance (though its market value is much higher) at that tempting 3% rate. And let’s say the new house you’re eyeing requires an additional mortgage of $700,000.

Without porting, you’d be facing a full $1 million mortgage at the hefty 6% rate. But with porting, things look a bit brighter. You’d maintain your $300,000 at 3% and only shoulder the 6% interest on the additional $700,000.

Why It Might Make Sense

Engulfed in the buzz of the Toronto real estate market lately? Then you’d know that mortgage rates, often overlooked, can shift the dynamics significantly. By porting, you can:

Save on Penalties: Exiting your mortgage contract early often brings about penalties. Porting allows you to bypass this entirely.

Retain Favorable Rates: As discussed, keeping a portion of your mortgage at a preferable rate can yield significant savings over time.

Curious about the art of selling your home or condo? Immerse yourself in an assortment of blogs crafted to offer you priceless insights and wisdom on the topic:

A Word of Caution

Porting does sound attractive, but it comes with its set of challenges:

Not Every Mortgage is Portable: It’s vital to read the terms or discuss them in-depth with your lender.

Qualifying is Key: Having qualified once doesn’t guarantee a seamless port, especially if aiming for a more valuable property. Ensure your finances are in great shape.

Timing Matters: Transitioning from selling your old property to securing a new one should be smooth. Any gaps could pose challenges.

In Toronto’s constantly shifting and highly competitive real estate market, tactics like mortgage porting can be invaluable. Yet, akin to handling multiple property offers, it demands skill, knowledge, and the right contacts.

Contemplating the advantages of using your current mortgage while upgrading? Reach out to us. We might not provide financial advice, but we surely can help you traverse the vibrant Toronto property scene and introduce you to top-notch mortgage experts.

And while you’re here, have you viewed our latest YouTube video? Click here. We’re offering some stellar real estate advice that’s a must-see!

Keen on exploring the Toronto real estate scene? We’re here, always ready to discuss. Contact us at 647-973-8392. To stay updated with insights, news, and real estate strategies, do subscribe to our monthly newsletter. Let’s transform your property aspirations into reality, together!

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