What's the Difference Between Renewing, Refinancing, Switching, and Porting Your Mortgage?

What's the Difference Between Renewing, Refinancing, Switching, and Porting Your Mortgage?

Mortgage terms can sometimes feel like a puzzle, and it’s easy to mix them up. You might think you need to refinance when you’re actually looking to switch lenders, or you might be talking about porting your mortgage when a transfer is what you really need. Knowing the right terms helps you get the right advice—and the best deals.

Let’s break down the main types of mortgage transactions: Renewing, Transfer/Switching, Refinancing, and Porting.

Mortgage Renewal

Your mortgage renewal comes up when your current term ends, known as the maturity or renewal date. At this point, you’ll need to decide whether to renew with your existing lender or explore other options.

It’s easy to just sign the renewal offer from your current lender and be done with it—it’s quick, convenient, and avoids the hassle. But doing so without shopping around could cost you. You might be missing out on better rates and terms elsewhere.

Key Tip: Always check other lenders’ offers before renewing to make sure you're getting the best deal.

Mortgage Transfer/Switch

If you find a better rate with a new lender, you might want to switch lenders. This means transferring your existing mortgage balance and remaining term to another lender—sometimes called a mortgage transfer.

You are able to switch your existing mortgage balance and remaining term or reduce it - you can't increase your mortgage amount or term during a transfer.

Key Tip: Most lenders will cover the costs associated with a mortgage transfer.

Mortgage Refinancing

Refinancing is the way to go if you want to extend your amortization back up to 30 years to reduce your payments or tap into your home equity. This allows you to adjust your mortgage for a new term, potentially with new rates, and even take out extra cash if needed.

Unlike switching, you’ll usually bear the cost of refinancing yourself, which can include an appraisal, lawyer fees, discharge fees, etc.. Unlike a transfer which can be done only at the end of the term, refinancing can be done anything you need to do so, but most of the time there are penalties for breaking a mortgage before the term is up. Refinancing might come with a slightly higher cost, so it’s important to compare and consider the overall benefit.

Key Tip: Refinancing can be a great tool to use if you need to consolidate some debt, renovate or purchase additional property.

Mortgage Porting

Porting is moving your current mortgage to a new property while keeping your existing lender, rate, balance, and term. If you need additional funds for the new property, your lender’s current rates apply to that portion only, blending it with your existing rate.

Porting can be convenient but isn’t always available or the best choice. It depends on what saves you the most money overall.

Conclusion

Using the right mortgage terms ensures you get accurate advice and the best rates. Whether you’re renewing, switching, transferring, refinancing, or porting, understanding your options will help you make smarter decisions. Remember, an informed borrower often gets the best deals and working with me as your mortgage specialist will ensure you always make informed, educated decisions.