Loan portability lets you keep your home loan when you sell one property and buy another: the lender swaps the security to the new home, and the loan, its rate and its features carry on. It saves the cost of discharging one loan and setting up another, and on a fixed rate it can avoid break costs.

It is a lender feature, not a right, usually with conditions: the same lender, settlements on the same day or close together, and a new valuation within the lender’s limits.

How does loan portability work?

  1. Check the loan allows it. Not every loan is portable, and conditions differ between lenders and products.
  2. Apply before you exchange on the new home. The lender values the new property and confirms the loan can move.
  3. Line up the settlements. The sale and the purchase usually settle on the same day, or within the window the lender allows.
  4. Security substitution. At settlement the mortgage over the old home is released and a new mortgage is registered over the new one. The loan account continues.

When does portability save money?

  • Fixed-rate loans. Discharging a fixed loan can trigger break costs. Porting keeps the fixed rate running to the end of its term. The fixed rate ending guide covers what happens at expiry.
  • Avoiding setup and discharge costs. One loan continues, so there is no discharge fee on the old loan and no new loan establishment.
  • A rate you want to keep. If your pricing is better than what is available now, porting holds it.

What conditions do lenders set?

  • Same lender, often the same loan type.
  • Timing. Simultaneous settlement is standard; some lenders allow a short gap.
  • Valuation and loan to value ratio. The new property must support the loan. If you need to borrow more, the increase is usually assessed as a new application, including your income.
  • The property type. The new property must meet the lender’s security rules, which can exclude some apartments, acreage or rural properties.
  • Fees. Some lenders charge a substitution or settlement fee for porting.

Portability, bridging or refinancing?

Three ways to fund a move
Option Best when
Port the loan Settlements line up, the loan is portable, and the current rate or fixed term is worth keeping
Bridging loan You buy before you sell and the settlements are weeks or months apart. See bridging loans.
Refinance Your rate is uncompetitive, you need a different structure or your lender will not lend what the new purchase needs. See refinancing.

If you are upgrading, compare porting against a refinance in dollars, including any break costs, before you exchange. The refinance calculator helps, and the article on deposit bonds covers exchanging before your sale settles.

How does portability work with a fixed rate?

A fixed rate is where portability does the most good. If two years of a fixed term remain and rates have fallen since you fixed, discharging the loan to move would trigger a break cost. Porting keeps the fixed loan running, so no break cost arises, as long as the loan amount and fixed portion stay the same. If you need to borrow more for the new home, the extra is usually set up as a separate variable split, leaving the fixed portion untouched.

What should you ask your lender first?

  1. Is my loan portable, and does my product have any exclusions?
  2. How far apart can the sale and purchase settlements be?
  3. What fees apply to a security substitution?
  4. Will the new property need a full valuation, and what loan to value ratio applies?
  5. If I borrow more, is the increase assessed as a new application?
  6. Does anything about the fixed portion change if the loan amount changes?

Get the answers in writing before you exchange on the new property, so the plan does not depend on an assumption.

How does a port work, step by step?

  1. Check the loan allows it. Portability is a product feature; the loan documents or the lender will confirm it.
  2. Tell the lender early, before you exchange on either property, and ask for the conditions in writing.
  3. Line up the settlements. Most lenders want the sale and the purchase to settle on the same day or within a short window.
  4. Valuation of the new home. The lender values it to confirm the loan stays within its limits.
  5. Substitution of security at settlement: the mortgage moves from the old home to the new one, and the loan, its rate and its features continue.

What if the new home costs more?

A port moves the existing loan; anything extra is new borrowing at today’s rates. Say a borrower ports a $500,000 fixed loan at 5.49 per cent with 25 years left and borrows another $200,000 variable at 6 per cent over 30 years. The repayments are about $3,067 and $1,199 a month, about $4,266 in total, and the new borrowing is assessed against current income like any new loan. Ask whether the increase can sit in a split of its own, so the fixed portion is untouched.

What mistakes should you avoid?

  • Assuming the feature exists because the loan is with a major lender.
  • Exchanging on the purchase before confirming the settlement window the lender will accept.
  • Forgetting that a port does not remove the need to qualify for any extra borrowing.
  • Comparing only the break cost and not the rate: if better rates are on offer, refinancing can still cost less over the years ahead. The refinancing guide sets out the comparison.

Should you port or start again?

  • Is your current rate competitive with what new customers are offered today? If not, a new loan may cost less.
  • Is any part of the loan fixed, and what would breaking it cost? Ask for the figure in writing.
  • Can your settlements happen on the same day, or within the window your lender allows?
  • Will the new property suit your lender: its type, size and location?
  • Do you need to borrow more, and will the increase be at today’s rate?
  • Are there fees to port, such as a substitution or valuation fee?

If most answers favour staying, port. If the rate gap is wide and nothing is fixed, compare a refinance on the same day as the purchase.

Questions people ask

Can I take my home loan with me when I move?

Yes, if your loan has a portability feature and the lender approves the new property: the loan, rate and features continue with the security moved to the new home.

Does porting a loan avoid fixed-rate break costs?

It can, because the fixed loan is not discharged. If you change the loan amount or structure as part of the move, check with the lender whether break costs apply.

Can I borrow more when I port my loan?

Usually, but the extra amount is assessed like a new application, including your income and the new property’s valuation.

Do the sale and purchase have to settle on the same day?

Most lenders require simultaneous settlement or a short gap. If the dates are further apart, a bridging loan may suit better.

Is portability always the cheapest option?

No. If your rate is no longer competitive, refinancing the whole loan can save more than the costs porting avoids. Compare both before deciding.

Charles Touma works out whether porting, bridging or refinancing costs least for your move, with the settlement timing to match. A free 30-minute call before you exchange keeps the options open. General information only, not credit advice; portability terms differ by lender and product. Figures are illustrations at the stated rates, not quotes.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.