When considering your next move, it’s important to know all the facts so you can make an informed decision. Many people aren’t aware that they may be able to port their existing mortgage to their new property and retain the interest rate on the balance of the old mortgage for the same term. Best of all, CIBC may waive or reimburse the full or partial amount of the prepayment charge to port your mortgage as you aren’t refinancing or renewing the mortgage before the end of its term.
Porting your CIBC Fixed Rate Closed Mortgage®
Porting your mortgage is funding a new mortgage on a different property using the remaining term and rate of your existing mortgage. You can port a mortgage to a newly purchased property or to a property you already own where you don’t have a mortgage or line of credit. Except for the CIBC Variable Flex Mortgage®, all CIBC mortgages can be ported, provided you meet all the requirements.
In a rising-rate environment, one benefit of porting is that you could receive a refund of all or part of the prepayment charges. As well, if you meet the requirements in your existing mortgage agreement and are approved to port your mortgage, you can keep the existing rate on your outstanding principal amount for the remainder of the term on your existing mortgage.
For example on a straight port, if you have 2 years remaining out of a 5-year term on your original mortgage at a fixed interest rate of 2.99%, when you purchase your new property and start your new mortgage, it would be a 2-year mortgage at 2.99%.
Replacing your CIBC Variable Flex Mortgage
Perhaps you have a CIBC Variable Flex Mortgage and are selling your property and purchasing another within 90 days. If you meet all our requirements, we may be able to provide financing for the purchase of the new property and refund all or a portion of the prepayment charge that you would have otherwise paid on your old mortgage for ending the term early.
What information do I need to have on hand to discuss my options?
Before speaking with your advisor, you should know the approximate values of your existing property and the one you’re planning to buy. Also, think about when you might be selling your property and when you’ll be purchasing the new one, as these will factor in your discussion.
To get an idea of the size of the mortgage you’ll need, use the affordability calculator. Just remember to include property tax, income statements, and monthly fixed expenses such as car payments, utilities, credit cards and lines of credit. The more details you include, the more accurate the estimate will be.
What are the different types of ports?
There are 4 types of ports for the CIBC Fixed Rate Closed Mortgage:
Straight port
A straight port means the principal amount of the mortgage on the new property is the same as the remaining principal amount of the original mortgage. The interest rate for the new mortgage will be the same as the original mortgage, and the term will be the same as the remaining term of the original mortgage.
Port and increase
A port and increase means the principal amount of the mortgage on the new property is more than the remaining principal amount of the original mortgage. The interest rate on the new mortgage will be a blend of the interest rate on the remaining balance of your original mortgage and CIBC’s current interest rate for a product with a similar term of the old mortgage on the additional funds.
Port and decrease
A port and decrease means the principal amount of the mortgage on the new property is less than the remaining principal amount of the original mortgage. A partial amount of the prepayment charge will be waived/reimbursed based on the balance of the new mortgage. The interest rate and term of the mortgage on the new property will be the same as the interest rate and remaining term of the original mortgage.
Delayed or reverse port
A delayed or reverse port means the mortgage on the new property is advanced up to 120 days before the original mortgage is paid off. In some cases, bridge financing may be required, for example to pay for the down payment or closing costs related to the purchase of the new property.
What are the different types of replacements for a CIBC Variable Flex Mortgage?
Straight replacement
A straight replacement applies when the mortgage amount on the new mortgage is the same as the old CIBC Variable Flex Mortgage.
Replacement and increase
A replacement and increase applies when the mortgage amount on the new mortgage is more than the amount on the old CIBC Variable Flex Mortgage.
Replacement and decrease
A replacement and decrease applies when the mortgage amount on the new mortgage is less than the amount on the old CIBC Variable Flex Mortgage.
Am I able to port if I am building my next home or property?
Yes, you may be able to obtain construction financing that would advance funds in stages as the construction is completed. To qualify you would need to begin withdrawing funds within 90 days of the sale of your existing property and your new home must be completed within one year.
What would be the impact to my creditor insurance for mortgage, life, disability or illness?
If there is a change to the personal credit product, it could affect the creditor insurance on the product and the coverage could be terminated. Speak to your advisor about how porting your mortgage might impact your creditor insurance and work with them on the necessary steps to maintain your coverage.
With so many financial implications to consider when moving, it is important to speak with an advisor to determine the best option for your situation. Your advisor will be able to walk you through your options for porting, the application process, the documents needed, and if applicable, ensure that your creditor insurance is transitioned to your new property.
