Portability Feature
Helps Sagen-insured borrowers save on the costs of a new mortgage by “porting” their mortgage default insurance to a new home.
Most Lenders have a portability feature, which allows the transfer of an original mortgage to a new property, preserving a low interest rate and saving the cost of setting up a new mortgage. If a homebuyer decided to port a mortgage to a new home and the mortgage is insured by Sagen, the mortgage insurance can also be ported. This reduces future mortgage insurance premiums. This product allows borrowers with a Sagen insured mortgage to save on the costs associated with a new mortgage by taking advantage of the L ender’s mortgage portability plan and “port” the mortgage insurance as well.
Acceptable Loan Purpose and Applicable Loan-to-Value Limits
Purchase transactions:
- 95% LTV
- Property value ≤ $500,000 – 5% down payment
- Property value > $500,000 and < $1,500,000 – 5% down payment required up to $500,000, with an additional 10% down payment on the portion of the home value above $500,000.
Time Period
- Mortgage insurance may be ported to a new property for up to a maximum of six (6) months after the closing date of the currently insured mortgaged property.
Amortization Options
- Straight port: amortization of the new loan cannot exceed that remaining on the original loan.
- Port / Top-Up with increased loan amount or increased LTV ratio:
Maximum amortization will be the greater of using the following
A. Blended Amortization: \frac{(Outstanding\,Balance\, x\, Remaining\,Amortization)\,+\,(New\,Funds\, x\, New\,Amortization)}{Outstanding\,Balance\, +\, New\,Funds} B.Lapsed Time Calculation: Amortization on new mortgage – Amortization elapsed on the original mortgage.
Premium Rate
- Straight port: No new premium is payable.
- The premium to be paid is the lesser of:
- Full Premium Calculation: Full premium rate on total loan amount less applicable premium credit.
- Top-up Premium Calculation: Top -up premium rate on new funds.
Standard Premium Rate Chart
| LTV Ratio | Premium Rate | Top-Up Premium |
|---|---|---|
| Up to 65% | 0.60% | 0.60% |
| 65.01% - 75% | 1.70% | 5.90% |
| 75.01% - 80% | 2.40% | 6.05% |
| 80.01% - 85% | 2.80% | 6.20% |
| 85.01% - 90% | 3.10% | 6.25% |
| 90.01% - 95% | 4.00% | 6.30% |
The above chart is for mortgages with an amortization that is 25 years or less. If a mortgage is eligible for an amortization greater than 25 years (up to 30 years) an additional premium of 0.20% will apply.
For specialty products, please refer to the applicable product overview for premium rates The mortgage insurance premium is non-refundable, paid at the time of closing and may be added onto the mortgage.
Premium Credit
- Applicable for purchase applications where full premium was paid on the original mortgage
- Premium credit will be applied to the full premium on the new mortgage as per the table below:
| From Original Closing Date | Of Original Premium Paid |
|---|---|
| Within 6 months | 100% |
| Within 12 months | 50% |
| Within 24 months | 25% |
*Sagen’s mortgage insurance continues to be portable beyond two (2)years; however, the premium credit will not apply.
Borrower Qualification
- Original mortgage must have been insured by Sagen and be up to date.
- Borrower reassessment is required. Existing requirements related to income, down payment and credit worthiness apply.
- Where more than one borrower is involved, at least one of the borrowers must have been identified on the original application as a borrower and remain on title.
- Complete borrower re-qualification is required when the borrower increases the loan amount or the LTV ratio.
Documentation requirements
- Offer to Purchase
- Port with increased loan amount and / or LTV ratio: standard documentation requirements
