Key Takeaways
- Portability, also called substitution of security, lets you keep your existing loan and swap the property it is secured against, provided your lender and loan product allow it.
- Lenders usually expect the new property to be worth the same as or more than the old one, with the loan amount unchanged.
- Same-day settlement is the simplest path, while selling first ties up sale funds as temporary security.
- With rates rising in 2026, an older fixed rate may be worth keeping, while break fees on leaving one may be smaller.
The contract on your next home is signed, the sale of your current one is under way and the loan sitting behind it all has a rate you would like to keep. Many Australian lenders let you transfer your mortgage to another property through a feature known as home loan portability or substitution of security. Whether it works for you depends on your loan product, the new property and how your settlement dates fall.
Closing the loan and taking out a new one, with the same lender or another, is the alternative. The two routes can differ sharply in cost, and a broker for changing home loans can compare them once your sale and purchase figures are known.
How Does Mortgage Portability Work?
A port swaps the property behind your loan while the account itself carries on. The parts that matter most are:
Loan Security That Changes
Your lender releases its mortgage over the property you are selling and registers a new mortgage over the one you are buying. The loan contract stays in place throughout, so the old loan is not discharged and no new loan is settled.
Loan Terms That Carry Across
In most cases, the interest rate, any remaining fixed-rate period, the repayment type and the loan term move across unchanged. Redraw and an offset account, where your loan has them, typically stay attached, so the way offset accounts save interest continues through the move. Repayments usually carry on without interruption because the account stays the same.
Approval Steps That Come First
A port is not automatic, because the lender has to approve the new property before settlement. Lenders typically ask for a substitution request, order a valuation of the new property and issue variation documents for you to sign. Some want the request lodged before your sale settles. Your conveyancer and the lender then coordinate the release of the old mortgage and the registration of the new one.
What Could Stop You Porting Your Loan?
Lenders can decline a port over the loan product, the new property or the account’s repayment history:
Loan Eligibility
Portability is a product feature, not a legal right, and not every home loan includes it. Lenders commonly exclude existing bridging or relocation loans, and loans with an increase still awaiting approval. Your loan contract or your lender can confirm whether you hold a portable home loan.
Security Value
Lenders typically want the new property to be worth the same as or more than the one being sold. The valuation can come in below the purchase price.
Where it does, typical options for a low bank valuation may include contributing cash or reducing the loan to bring the loan-to-value ratio (LVR), the loan as a percentage of the property’s value, back within the lender’s limit.
Property Type
The new property has to be acceptable security in its own right. Commercial property is a common exclusion, and some lenders apply tighter policies to certain property types or locations, such as very small apartments or areas they consider higher risk. A property the lender would accept for a new loan is usually a reasonable sign it will accept it for a port.
Account Conduct
Lenders may review how the loan has been managed, and missed or late repayments could lead them to decline a substitution or look more closely at your finances.
As a general guide, portability rules differ between lenders and between products from the same lender.
How Does Settlement Timing Affect a Ported Loan?
Same-day settlement allows a direct swap, while any gap between the sale and the purchase needs a temporary arrangement:
Settling Together
When both settlements happen on the same day, known as simultaneous settlement, the lender can release the old property and take the new one as security in a single step. It is the simplest version of a port, which is why many movers ask their conveyancer to align the dates when negotiating contracts.
Selling First
Lenders commonly hold part of the sale proceeds as temporary security when you sell first, often in a term deposit equal to the loan amount. That money typically stays locked until the purchase settles, so it cannot go towards your deposit or moving costs.
Buying First
Buying before you sell usually needs extra borrowing alongside a port, because the loan cannot sit across both properties at once. Some movers use bridging finance to cover the overlap, and a bridging loan broker can explain how that may sit alongside your existing loan. Lenders typically assess bridging as additional credit, so your income and the combined debt both count.
Processes and lead times for a substitution vary between lenders, so these sequences are a general guide only.
What Happens When the New Property Costs More or Less?
A price gap between the two homes does not rule out a port. Because portability assumes the loan limit stays the same, the gap changes what the lender needs from you:
Borrowing More for the Upgrade
A larger loan for a more expensive property is usually handled as a top-up alongside the port, and the extra amount generally needs a new credit assessment. Lenders regulated by the Australian Prudential Regulation Authority (APRA) typically test whether you could meet repayments at a rate at least 3 percentage points above the loan rate. APRA confirmed that buffer on 28 May 2026 and reviews its settings regularly, so it may change.
The top-up may not carry your existing rate. Lenders often set it up as a separate split at current rates, so the original portion keeps the older fixed rate and the new portion runs on its own rate, as with other split home loans.
Paying Down After Downsizing
A cheaper property usually means the lender asks for a smaller loan to keep the LVR within its limit, and you may choose to repay more from the sale proceeds. On a variable loan, that repayment usually costs nothing extra.
On a fixed-rate loan, repaying more than the lender’s extra repayment allowance during the fixed period may trigger break costs, even though the loan itself stays open.
Moving Above 80% LVR
Once the loan exceeds 80% of the property’s value, lenders typically require lenders mortgage insurance (LMI), which protects the lender, not you. Some lenders may carry an existing LMI policy across where the loan amount stays the same, while a top-up that pushes the LVR higher may bring a new or additional premium.
Certain professionals may qualify for a waiver, and a broker for LMI waived loans can check whether your occupation appears on a lender’s list.
Is Porting Worth It Compared With Refinancing?
Porting usually comes out ahead when your current rate beats today’s offers, and a new loan comes out ahead when it does not, once fees and break costs are counted:
Grounds for Keeping the Loan
Keeping your loan tends to pay when its rate sits below what lenders offer today. The Reserve Bank of Australia raised the cash rate target four times in 2026, most recently to 4.60% on 29 September, and has said further increases remain possible. A fixed rate locked in before those rises may now sit below comparable offers, and a port keeps that difference for the rest of the fixed period.
A port may also suit borrowers whose finances have become harder to assess since they applied, such as after a move into self-employment. Depending on the lender, a port with no increase may involve a lighter review than a new application.
Grounds for a New Loan
Refinancing into a new loan may be the better fit when your current rate has fallen behind the market, when your loan lacks features you now want or when the amount you need is very different from what you owe. It lets you compare lenders on rate, fees and features as you move, and a refinance mortgage broker can set those options against the cost of porting.
Break Fees After Rate Rises
Break fees on fixed loans may be small or even nil after a run of rate rises, because the fee generally grows the more rates have fallen since you fixed. Only your lender can give the actual figure, and quotes can change daily.
Costs on Each Route
A port typically involves a lender fee for the substitution and a valuation of the new property. It also brings Victorian government fees to discharge the old mortgage and register the new one, which change each 1 July and are published by Land Services Victoria. A new loan brings a discharge fee on the old loan, any break fee, a valuation, application or establishment fees and the same government registration costs.
Adding these to the other costs of the move with a buying and selling costs calculator can show the full cost of each route.
Confirming Portability Before Signing
A practical next step may be asking your lender for written confirmation that your loan is portable before you sign a contract on the new property. That confirmation can also cover the substitution fee, the valuation requirement and any top-up or break fee your purchase would trigger.
If you are weighing up whether to take your current loan to your next home, the team at Shern Advisory can talk you through the options that suit your circumstances.
Frequently Asked Questions (FAQs)
1. Can I port my mortgage to a different lender?
Generally, no. Portability works within the same lender, because the loan contract itself stays in place.
Moving to a new lender means discharging your loan and refinancing, with a new application, fees and any break costs on a fixed rate.
2. Do I still pay stamp duty if I port my home loan?
In most cases, yes. Portability changes the security behind your loan, not the purchase itself. Land transfer duty, commonly called stamp duty, is assessed on the new property as normal and usually paid at settlement.
The State Revenue Office administers the duty in Victoria, along with any exemptions or concessions that may apply to your purchase.
3. Can I port my loan to a house I am building?
It can be difficult. Vacant land is often worth less than an established home, which can make the like-for-like value test hard to meet. Construction lending is also usually paid out in progress payments as the build moves along.
Many lenders handle a build through a new construction loan or a loan variation.
4. Can I port my loan if one borrower is coming off it?
Removing a borrower changes the parties to the loan contract, so lenders generally treat it as more than a substitution. The remaining borrower is usually assessed on their own income and expenses, and the lender may require a new application.
Where the change follows a separation, a property settlement may add legal steps, so a lawyer may need to be involved alongside the lender.
5. Can I port an investment loan to my new home?
Some lenders allow it. Moving an investment loan onto a home you will live in usually counts as a change of loan purpose, and lenders often price investment and owner-occupied loans differently, so the rate may change.
There can also be tax consequences. The Australian Taxation Office generally looks at what borrowed money is used for, not which property secures the loan, when deciding whether interest is deductible. Interest on borrowing used for a home you live in is generally not deductible. A registered tax agent can explain how that may apply to your situation.
This article contains general information only. It does not take into account your objectives, financial situation or needs, and you may wish to speak with a qualified professional before acting on it.