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Know CMHC Portability Rules: Not a Switch or Refinance | Your Mortgage Minute · Your Mortgage Minute | Onlendhub

• 0:15
  SPEAKER_00: Welcome to another episode of Your Mortgage Minute.
• 0:18
  SPEAKER_00: I am Sarah, you co-host, and we have our mortgage expert Mooley with us in studio today.
• 0:23
  SPEAKER_00: Are you thinking about buying and moving this fall?
• 0:26
  SPEAKER_00: If you've got an insured mortgage, you might assume you can just take it with you.
• 0:31
  SPEAKER_00: But porting has rules, and they're tighter than most people expect.
• 0:35
  SPEAKER_01: They really are.
• 0:37
  SPEAKER_01: The biggest misconception I see is people thinking porting works like switching or refinancing.
• 0:43
  SPEAKER_01: It doesn't.
• 0:44
  SPEAKER_00: So what is it?
• 0:46
  SPEAKER_01: You sell your place, you buy another one, and sometimes you can move your insured mortgage onto the new property.
• 0:53
  SPEAKER_01: CMHC calls that straight portability.
• 0:56
  SPEAKER_01: Yeah, and CMHC's rules for straight portability are pretty specific.
• 1:01
  SPEAKER_01: Three limits matter.
• 1:03
  SPEAKER_01: First, the amortization on the new loan can't go past what's left on your original one, and it tops out at 25 years, or 30 through CMHC Home Start.
• 1:14
  SPEAKER_00: So with 22 years left, you can't stretch it back to 25 on the new place.
• 1:20
  SPEAKER_01: No.
• 1:20
  SPEAKER_01: Second, the loan to value on the new property has to be equal to or less than the LTV on your existing one.
• 1:28
  SPEAKER_01: Third, the new loan amount can't be more than your current outstanding balance.
• 1:33
  SPEAKER_01: Those three, that's the official rule set.
• 1:37
  SPEAKER_00: Because I think people hear portable and figure they can add the cost of the new place, pull some equity out, stretch the amortization, and still keep the same insured mortgage.
• 1:48
  SPEAKER_01: And they can't.
• 1:49
  SPEAKER_01: Bump the loan amount or stretch the amortization past what CMHC allows, and you're outside straight portability.
• 1:56
  SPEAKER_01: You're into a different transaction entirely, which is where the switching and refinancing confusion bites.
• 2:03
  SPEAKER_00: Okay, quick definitions.
• 2:05
  SPEAKER_00: Switching is moving your mortgage to a different lender without changing the amount or the amortization.
• 2:11
  SPEAKER_00: Refinancing is changing the terms, taking equity out, adding money.
• 2:16
  SPEAKER_01: That's it.
• 2:18
  SPEAKER_01: Porting keeps the same insurance certificate on a new property, but only inside those CMHC limits.
• 2:24
  SPEAKER_01: Switching and refinancing are separate paths.
• 2:28
  SPEAKER_01: Now here's where I want to be careful about what's actually official versus lender policy.
• 2:34
  SPEAKER_01: Go ahead.
• 2:35
  SPEAKER_01: The CMHC rules on straight portability are clear.
• 2:39
  SPEAKER_01: Amortization, LTV, loan amount.
• 2:43
  SPEAKER_01: But on stress testing for a switch or a refinance, the official rules don't lay out a blanket exemption, and there's no single formula for every scenario.
• 2:53
  SPEAKER_01: Lenders underwrite differently, transaction by transaction.
• 2:56
  SPEAKER_01: Some apply their own overlays, some don't.
• 3:00
  SPEAKER_01: So nobody should be telling you an eligible uninsured straight switch is automatically subject to the prescribed minimum qualifying rate.
• 3:08
  SPEAKER_01: That just isn't established.
• 3:10
  SPEAKER_00: But if the stress test does apply, the formula's the greater of your contract rate plus two points, or 5.25%, right?
• 3:20
  SPEAKER_00: Right.
• 3:21
  SPEAKER_00: So renewing at 4.5%.
• 3:24
  SPEAKER_01: You qualify at 6.5.
• 3:27
  SPEAKER_01: 4.5 plus 2 beats 5.25, so it's 6.5.
• 3:33
  SPEAKER_00: The loan to value, LTV, is where people get caught, though, isn't it?
• 3:38
  SPEAKER_00: Bought at a low pandemic rate, homes dropped in value, porting might not even be possible under that rule.
• 3:45
  SPEAKER_01: It's a real concern.
• 3:47
  SPEAKER_01: Say your original place was worth$850,000.
• 3:51
  SPEAKER_01: Mortgage of$480,000 at 1.9%.
• 3:55
  SPEAKER_01: Payments about$2,090 a month.
• 3:58
  SPEAKER_01: Renew at 4.5, and that jumps to roughly$2,657.
• 4:04
  SPEAKER_00: Hmm,$647 more.
• 4:08
  SPEAKER_01: Yeah.
• 4:09
  SPEAKER_01: Now try to port and the appraisal comes in low.
• 4:12
  SPEAKER_01: New place appraises at$790,000.
• 4:15
  SPEAKER_01: At an 80% LTV ceiling, your max loan is$632,000.
• 4:21
  SPEAKER_01: On the original value, the ceiling was$680,000.
• 4:25
  SPEAKER_01: That's$48,000 less room.
• 4:28
  SPEAKER_00: So even if you want to port, the numbers might not let you.
• 4:32
  SPEAKER_01: And that's before consolidating debt or extending the amortization.
• 4:36
  SPEAKER_01: Either one pushes you into a refinance, not a port.
• 4:41
  SPEAKER_00: Quick one.
• 4:45
  SPEAKER_01: No.
• 4:46
  SPEAKER_01: Principle still falls.
• 4:48
  SPEAKER_01: It just falls more slowly if the amortization's longer or the rate's higher.
• 4:53
  SPEAKER_00: And the appraisal alone doesn't decide approval.
• 4:56
  SPEAKER_00: Lenders look at the full file.
• 4:59
  SPEAKER_01: Correct.
• 5:00
  SPEAKER_01: So the takeaway: a port is not a switch and it's not a refinance.
• 5:05
  SPEAKER_01: CMHC's straight portability rules cap your amortization, your LTV, and your loan amount.
• 5:12
  SPEAKER_01: Anything past that is a different conversation with your lender.
• 5:16
  SPEAKER_00: And check the current rules and your lender's policy.
• 5:19
  SPEAKER_00: Thanks for listening to Your Mortgage Minute by OnlandHub.ca.
• 5:23
  SPEAKER_00: See you in another episode next week.
• 5:25
  SPEAKER_00: This is educational content only, not financial, legal, or tax advice.