Yes, when you perform a straight port of your mortgage, you generally keep your original interest rate. This type of mortgage transfer allows you to move your existing mortgage to a new property, retaining favorable terms you've already secured.
Understanding a Straight Mortgage Port
A straight mortgage port is a specific type of mortgage transfer designed for simplicity and continuity. It's essentially moving your existing mortgage from one property to another without significant changes to its core components.
Key characteristics of a straight port include:
- Principal Amount: The principal balance of the mortgage on your new property remains the same as the remaining principal amount from your original mortgage. This means you're not borrowing additional funds beyond your current mortgage balance.
- Interest Rate: A crucial benefit of a straight port is that the interest rate for your new mortgage will be the same as the one you had on your original mortgage. This can be particularly advantageous if current interest rates are higher than your existing rate.
- Mortgage Term: The remaining term of your original mortgage will also carry over to the new mortgage. This ensures that your amortization schedule and final payment date largely remain consistent.
How a Straight Port Benefits You
Opting for a straight port can offer several practical advantages, especially in certain market conditions:
- Rate Security: If you have a competitive interest rate from your original mortgage, a straight port allows you to lock in that rate and avoid exposure to potentially higher current market rates.
- Predictable Payments: Keeping the same interest rate and remaining term means your mortgage payments will likely remain consistent, providing financial stability and predictability.
- Cost Savings: By avoiding a new mortgage application that might come with new fees or a higher interest rate, a straight port can be a cost-effective solution when moving homes.
Key Aspects of a Straight Port
To illustrate the consistency offered by a straight port, consider the following comparison:
| Feature | Original Mortgage | Straight Ported Mortgage |
|---|---|---|
| Principal | Remaining balance | Same remaining balance |
| Interest Rate | Original agreed rate | Same original rate |
| Mortgage Term | Remaining term | Same remaining term |
| Lender | Generally the same lender | Generally the same lender |
It's important to discuss the specifics of porting your mortgage with your lender, as eligibility criteria and any associated costs can vary.
