The Port Window Trap: Your Mortgage Says "Portable." The Window Says Otherwise.

Most Canadian mortgage commitments say the mortgage is portable.

Portable means: when you sell your home and buy a new one, you can move your current mortgage — your rate, your balance, and your remaining term — to the new home instead of breaking it and paying a penalty.

That sounds simple. It is not, because of one number most buyers never see before they sign: the port window.

The port window is the number of days you have to complete the move. In Canadian commitments, that window is often 30 to 120 days. If your purchase closes 1 day after the window ends, you do not have a portable mortgage anymore. You have a broken mortgage — and a prepayment penalty.

Here are the 5 lines to find in your own commitment before you sign. You can check every one of them in about 10 minutes.

1. How many days is your window?

Find the portability section and look for the day count: 30, 60, 90, or 120 days are common.

Now think about a real move. You sell, you search, you buy, you close. A 30-day window means your purchase must close within 30 days of your sale. In a slow market, or if your purchase falls through once, that window can close before you do.

The trap: the window usually starts on the day your sale closes — not the day you find a new home.

2. Do you have to re-qualify?

Most lenders make you qualify again for the ported mortgage, as if it were a new application. Your income, your debts, and the new home's value are all checked again, at current rules.

If your income changed since you first qualified — a new job, parental leave, self-employment — the port can be refused even if you are inside the window. A refused port means the same result as a missed window: the mortgage is broken, and the penalty applies.

3. What if the new home costs more?

If the new home needs a bigger mortgage, most lenders blend the amounts: your old rate stays on the old balance, and the extra amount gets a new rate. That part is normal.

What is not always clear is whether the extra amount is priced at a posted rate or a discounted rate. The commitment should say. If it does not say, ask — in writing — before you sign.

4. Who decides if the new home is acceptable?

Some commitments give the lender discretion over whether the new property is acceptable for a port. Look for wording like "at the lender's sole discretion" or "subject to the lender's approval of the new property."

That wording means porting is not a right. It is a request the lender can refuse. Not every lender uses it — which is exactly why it is worth checking your lender's version before you rely on the word "portable."

5. What happens if the port fails?

If the port fails, the mortgage is paid out from your sale, and the prepayment penalty is charged. On a fixed-rate mortgage, that penalty is usually the greater of:

• 3 months' interest, or
• the IRD (interest rate differential) — a charge based on the gap between your contract rate and the lender's current rate for a similar term, applied to your balance for the time left in your term.

On a balance of $500,000 with 3 years left in the term, an IRD penalty can reach 5 figures. The exact number depends on your lender's formula and the rates on the day you break — which is why "I will just port it" is not a plan unless the 4 checks above pass.

A normal port clause also exists

Not every strict-looking line is a trap. Many lenders charge the penalty first and refund it when the port completes inside the window. That charge-then-refund setup is standard practice at several major lenders, and by itself it is not a red flag. The red flags are the short window, the re-qualification, and the discretion wording — the parts that decide whether the refund ever happens.

Check your own document

Before you sign, find these 5 things in your commitment:

1. The window, in days
2. Whether you must re-qualify
3. How a larger amount is priced
4. Any "sole discretion" or property-approval wording
5. The penalty formula that applies if the port fails

If any of the 5 is missing or unclear, ask your lender 1 question in writing: "If my purchase closes after the port window, or my port is refused, what exactly will I be charged?"

That is also what mguard.ai checks automatically. Upload your commitment and it flags the port window, the discretion wording, and what breaking the mortgage would cost — before you sign, not after you sell.