A relocation mortgage or a porting mortgage means moving your mortgage from one property to another due to relocation, this further means taking your current mortgage with all the terms and rates involved and moving it to another property. So for example if you are a few years into your mortgage term and have to relocate for whatever reason, a portable mortgage allows you continue with your mortgage at the same rate.
One of the reasons people choose to port their mortgage rather than break it is because it is considerably cheaper and their old interest rates might be lower than present rates. Another reason to port your mortgage is you can avoid the penalty that comes with prepayment of your mortgage if you choose to cancel your mortgage agreement rather than opt for a portable mortgage.
Porting a mortgage only works if you are selling your house at the same time you are buying a new one, also if the new rates are better than your old rates, you might have to pay the penalty of cancelling your mortgage. Another issue with a portable mortgage is that not all types of mortgages can be ported; most variable mortgages are not portable so you are advised to consult with your lender and find out if your mortgage is portable and if it is the best fit for you based on current rates.
Another problem you might face with a portable mortgage is that some lenders provide a short window for you to complete porting your mortgage and this might be a problem if you are unable to sell your current house, you are advised to properly discuss your options with your lender before proceeding to buy a new house.
A portable mortgage is not offered to anyone who desires it; you will have to fulfil the qualifications set out by your lender. Most lenders prefer to give this option to individuals who still have a source of income, so relocating of because of a new or better job is likely to get your mortgage ported. Portable mortgage is also offered to members of the armed forces because the military relocation system is raising concerns and a portable mortgage addresses some of those issues.
Considering all of these, it is best you ensure that opting for a portable mortgage will not leave you in a worse position than your previous mortgage would.
