Port, Blend, or Break Your Mortgage?
Moving to a new home? Compare all your options: port your existing mortgage, blend & extend with new funds, or break and refinance. See penalties, total costs, and find your breakeven point.
Updated for Q3 2025 - BC Market Conditions
Calculate Your Best Option
RBC, TD, BMO, Scotia, CIBC - Standard fixed-rate mortgages
Upsize: $100,000.00 (20.0%)
Understanding Your Options
Port Your Mortgage
Transfer your existing mortgage to your new property. Keep your current rate and avoid penalties.
- Your rate is better than today's rates
- Closing within 90-120 days
- Same or slightly higher mortgage amount
Blend & Extend
Combine your old rate with new funds at today's rate. Get a weighted average rate and restart your term.
- Upsizing by 10%+ (5%+ at monolines)
- Want to avoid penalty but need more funds
- Your rate is competitive with today's
Break & Refinance
Pay the penalty to exit your mortgage. Get a new mortgage at today's rates on your new property.
- Rates dropped 1-2%+ since you locked in
- Less than 12 months remaining in term
- Variable rate (3-months interest only)
Understanding Mortgage Penalties
If you break your mortgage, lenders charge a penalty. The type and amount depend on whether you have a fixed or variable rate.
Fixed-Rate Penalty
Lenders charge the GREATER of:
Formula: (Balance × Rate ÷ 12) × 3
Example: $500k @ 5.5% = $6,875
Formula: Balance × (Your Rate - Comparable Rate) × (Months ÷ 12)
Example: $500k × (5.5% - 4.5%) × (24 ÷ 12) = $10,000
Variable-Rate Penalty
Much simpler and typically much lower:
Formula: (Balance × Rate ÷ 12) × 3
Example: $500k @ 5.0% = $6,250
No IRD for variable rates!
Related Resources & Tools
📖 Week 8: Breaking, Porting & Penalties
Deep dive into mortgage portability rules, penalty calculations, and when to break vs port.
Read the Complete Guide →📋 Complete Porting Guide
Step-by-step guide to porting your mortgage, including timelines and lender requirements.
Explore Guide →💰 Penalty Calculator Explainer
Learn how 3-months interest and IRD penalties are calculated by different lenders.
Learn More →📊 Penalty Compare Sheet
Download our comparison worksheet to evaluate penalties across multiple lenders.
Download PDF →Need help deciding?
Book Free Consultation →Ready to get started?
Start Your Application →Frequently Asked Questions
What is mortgage porting and how does it work?
Mortgage porting (or portability) allows you to transfer your existing mortgage to a new property without breaking your contract. You keep your current rate and avoid prepayment penalties. Most lenders require you to close within 90-120 days and may charge a small porting fee ($200-$500). If you need more money, you can often add new funds at today's rates alongside your ported mortgage.
What is blend and extend on a mortgage?
Blend and extend combines (blends) your existing mortgage rate with new funds at the current market rate. The lender calculates a weighted average rate: (Old Balance × Old Rate + New Funds × New Rate) ÷ Total Balance. The 'extend' part means your term restarts (e.g., from 2 years left back to 5 years). This option typically requires you to upsize your mortgage by at least 5-10%. Not all lenders offer blend/extend on variable rates or downsizes.
When should I break my mortgage vs porting it?
Breaking makes sense when: (1) Rates have dropped significantly (1-2%+) since you locked in, making future interest savings exceed the penalty; (2) You're upsizing by >30% and the blended rate doesn't save enough; (3) You have <12 months remaining (lower penalty); (4) Your penalty is 3-months interest only (variable rate). Port when: (1) Your current rate is better than today's rates; (2) You're within the portability window; (3) Your lender offers favorable porting terms.
How are mortgage penalties calculated in Canada?
For fixed-rate mortgages, lenders charge the GREATER of: (1) 3-months interest, or (2) Interest Rate Differential (IRD). IRD = Balance × (Your Rate - Comparable Rate) × (Months ÷ 12). Big banks often use posted rates for IRD, inflating penalties. For variable-rate mortgages, the penalty is typically 3-months interest only (no IRD), making variable rates much cheaper to break. Always request an official penalty quote from your lender before deciding.
What's the difference between Big Bank and Monoline lender porting rules?
Big Banks (RBC, TD, BMO, Scotia, CIBC) typically have stricter rules: 90-day portability window, higher penalties due to posted-rate IRD calculations, and blend/extend requires 10%+ upsize. Monoline lenders (MCAP, First National, Merix) often offer: 120-day portability window, more favorable IRD calculations (use contract rate not posted), lower fees, and blend/extend with 5%+ upsize. Credit unions vary but often have member-friendly policies. Alternative/B-lenders typically don't offer portability at all.
How do I calculate my mortgage penalty breakeven point?
Breakeven Months = Penalty ÷ Monthly Interest Savings. For example: if your penalty is $12,000 and breaking saves you $400/month in interest (from a lower rate), your breakeven is 30 months. If you plan to stay longer than 30 months, breaking saves money long-term. This calculator shows total cost over your time horizon to help you decide. Always factor in your actual plans - if you might sell within 18 months, a 30-month breakeven makes breaking risky.
Disclaimer: This calculator provides estimates only and should not be considered financial advice. Actual penalties, porting rules, blending formulas, and total costs vary by lender, mortgage contract, and individual circumstances. IRD penalties may be significantly higher due to lender-specific calculations (e.g., posted rates vs. contract rates). Porting availability and blend/extend eligibility depend on your specific lender and mortgage terms. Always request official penalty quotes and verify portability options with your lender before making decisions. Breakeven calculations assume stable rates and consistent payment behavior. All rules and lender policies are current as ofOctober 2025 and are subject to change.