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Loan portability: moving your loan to the new property

Loan portability lets you keep your existing loan when you sell one property and buy another. Instead of discharging and re-originating, the loan transfers to the new security. On paper, this saves the discharge fee, the new application fee, and re-valuation costs. In practice, portability has narrowed since 2020, and many clients find it is no longer the shortcut it was.

How portability works mechanically

You apply for substitution of security. The lender re-values the new property, confirms the LVR remains acceptable, and replaces the old title on the mortgage with the new title. The loan number, rate, and remaining term all carry across.

What triggers a decline

Portability is not automatic. The lender’s acceptance depends on:

  • New LVR being at or below the original LVR (some lenders allow same-day cash-out to top up)
  • New property meeting the lender’s current policy (post-pandemic many lenders restricted high-density unit sizes, rural zoning, or specific postcodes)
  • Timing - most lenders require simultaneous settlement of old sale and new purchase, or at most a 5-10 day gap

The common catch

Since 2022, several majors have tightened policy on the new security without changing the loan terms. Your loan may have been approved against an apartment in 2019 that today wouldn’t pass the lender’s minimum-floor-area rule. When you port to a similar apartment today, the valuation gets rejected and portability fails.

When portability saves real money

  • You have a fixed rate below current market - porting preserves the old fixed rate; discharging triggers break costs on the remaining fixed term
  • Your original LMI was lump-sum capitalised - re-originating means a fresh LMI premium; porting keeps the original

When to discharge and re-originate instead

  • You want to change lender anyway (policy, rate, service)
  • You are changing loan structure (fixed to variable, P&I to IO) - porting rarely allows structural changes
  • You are topping up beyond the original loan amount - most ports allow a top-up but pricing reverts to current rates, so there may be no saving

Portability costs $150-$400 in admin fees, takes 2-4 weeks to process, and usually requires a new valuation ($300-$500). On a straightforward move where you are keeping the same lender and loan structure, it saves the discharge fee ($350) and an origination fee ($600). On anything complex, it often adds friction without saving money.