Can Mortgages Be Transferred to Another Person in Canada?

When selling a home, the idea of transferring your mortgage to a new property can be appealing—especially if you like your current mortgage terms and want to avoid hefty prepayment penalties. But transferring a mortgage in Canada isn’t as straightforward as it may sound. Here's a detailed look at how mortgage transfers work, along with answers to some common questions.

What Does It Mean to Transfer a Mortgage?

Transferring, or "porting," a mortgage means moving your existing mortgage—including its current rates and terms—from one property to another. This option is available only if you're buying a new property at the same time as selling your existing one. It's ideal for homeowners who want to maintain favourable mortgage conditions while transitioning to a new home.

Transferring vs Renewing a Mortgage: What’s the Difference?

Many homeowners confuse transferring a mortgage with renewing one. Here’s the distinction:

• Transferring a Mortgage: Occurs when you move your current mortgage to a new property during the fixed term (often five years).
• Renewing a Mortgage: Happens when your mortgage term ends, allowing you to renegotiate terms or switch lenders without penalties.

Can You Transfer a Mortgage to Another Property?

Yes, transferring a mortgage is specifically designed for moving your existing loan to a new property. Your mortgage is typically tied to the home you own, but a transfer allows you to keep the same terms while buying a different house.

Do All Lenders Allow Mortgage Transfers?

No, not all lenders permit mortgage transfers. Some banks and financial institutions may restrict this option. Before committing to a mortgage or planning a move, check with your lender or consult a mortgage broker to understand your options.

Can You Transfer a Mortgage to Another Bank?

Transferring a mortgage usually involves keeping the same lender because you want to retain the terms and conditions of your current loan. Moving to a different bank during your mortgage term is not considered a transfer—it’s seen as breaking your mortgage. This process requires requalifying with the new lender and paying penalties for early termination.

Can You Transfer a Mortgage When Moving to a New City?

It depends on the lender. Some lenders allow transfers across cities, while others do not. Moving for a new job can complicate things, especially if there’s a probationary period, as lenders prefer borrowers with stable employment and income.

If you're transferring within the same employer or have secure income, you'll likely face fewer hurdles. However, if you’re relocating without a job or stable income, transferring a mortgage becomes much more challenging.

Can You Transfer Both Variable-Rate and Fixed-Rate Mortgages?

Not all mortgages are transferable. Most variable-rate mortgages cannot be ported, whereas many fixed-rate mortgages can be. A mortgage broker can guide you on which products offer flexibility for transfers.

How Long Does a Mortgage Transfer Take?

The timeline for transferring a mortgage is often tight—usually within 30 to 90 days of selling your existing property. In competitive markets like Toronto or Vancouver, this timeframe can be challenging, making it crucial to plan accordingly.

Do You Need to Requalify for a Mortgage Transfer?

Yes, requalifying is typically required. Even if you’re sticking with the same lender, they will reassess your financial situation, credit history, income, and the details of your new property before approving the transfer.

Can You Transfer a Mortgage with Bad Credit?

If your financial situation has changed—due to lower income, increased debt, or poor credit—it could be difficult to transfer your mortgage. Lenders may be hesitant to approve a transfer under such circumstances.

Helping Canadians with Mortgage Transfers

If you’re selling your home and considering a mortgage transfer, the independent mortgage experts at Wilson Mortgage can help. They’ll evaluate your options and connect you with lenders offering competitive terms—whether you’re seeking a fixed-rate or variable-rate mortgage.

Unlike traditional banks, Wilson Mortgage works with hundreds of lenders, including those specializing in borrowers with bad credit, no credit, or unreliable income. Their independent status ensures they prioritize your best interests, offering tailored solutions that align with your financial needs.

Final Thoughts

Transferring a mortgage can be a smart financial move if you're transitioning to a new home and want to keep your existing mortgage terms. However, the process involves careful planning and understanding your lender's policies. Whether you're looking for flexibility or exploring alternatives, consulting a mortgage broker or independent expert can simplify the process and save you money.

For more information or assistance with transferring your mortgage, reach out to Wilson Mortgage today.