Peace-of-Mind Options

Mortgage Portability and Assumable Mortgages

When you arrange your mortgage, ask about your long-term options just in case circumstances change on the road ahead - especially should you decide to sell your home in the future. If so, the following options will prove to be very useful.

Mortgage Portability

This option lets you transfer the interest rate and all the existing terms and conditions of your current RBC Royal Bank mortgage to your new home, subject to a credit review and property appraisal when you make the new home purchase. You may also qualify to add-on to the mortgage if you require a larger mortgage amount.

Depending on current rates and your final blended rate with the add-on, your modified monthly payments could be more economical than they would be with a new RBC Royal Bank mortgage.

By "porting" your mortgage, you automatically avoid any prepayment charges for breaking your mortgage early.

• There is no charge for using this portability option. Legal fees would apply to register the mortgage on your new home.
• The mortgage portability option cannot be used in combination with the assumable mortgage option.

Assumable Mortgages

You can use this option to offer your mortgage to a prospective buyer, who can take it over with the purchase of your home if he or she qualifies for an RBC Royal Bank mortgage. Allowing your buyer to assume your mortgage, particularly if it's a low-interest, longer-term mortgage, is a good tactic in a buyer's market, especially when mortgage rates are rising.

When there are more homes for sale than potential buyers, an attractive mortgage rate can help boost the appeal of your home and swing a sale in your favour. And if rates are on the rise, your low-rate mortgage gives your buyer built-in monthly savings until the end of your mortgage term.

Assumable mortgages are an option if:

• Your buyer assumes your mortgage, you can be relieved of all responsibility related to its fulfillment.
• Your buyer assumes only a portion of your mortgage, you may be required to pay a prepayment charge on the unassumed balance.
• Your buyer needs an amount that's higher or lower than your outstanding mortgage balance, here's what happens:
  
  
  • a higher amount is required, the buyer can apply to Add-on to the existing principal balance.
  • the buyer needs less than your outstanding mortgage balance, the amount required is transferred to the buyer and you pay off the difference. The balance that has not been assumed may be subject to prepayment charges. For example,

    Your current mortgage $80,000
    Your buyer assumes $60,000
    You must pay off $20,000*

* Depending on the terms of your mortgage, this is the amount that could be subject to a prepayment charge.

Whatever home buying stage you're in, we can offer you real savings and sound advice. Contact a mortgage specialist today!