Portability

Portability (or loan portability) is a feature that lets you transfer your existing loan from one property to another without refinancing. When you sell your current home and buy a new one, you keep the same loan, lender, and interest rate. This saves thousands in discharge fees, break costs, and application fees.

How Portability Works

The Standard Process (Without Portability)

When you sell and buy without portability:

1. Sell current property

   • Pay discharge fee: $300-$500
   • Pay break costs (if fixed): $5,000-$30,000+
   • Loan fully closed

2. Apply for new loan

   • New application: 2-4 weeks
   • New application fee: $600-$1,200
   • New valuation: $200-$400
   • New legal costs: $1,500-$2,500
   • Risk: Might not get approved or same rate

3. Total costs:

   • Discharge + break costs: $5,800-$32,000
   • New loan costs: $2,300-$4,100
   • Total: $8,100-$36,100

With Portability

When you have loan portability:

1. Sell current property

   • Notify lender you're porting loan
   • No discharge fee ✓
   • No break costs (usually) ✓

2. Buy new property

   • Transfer loan to new property
   • Same rate, same terms ✓
   • Minimal paperwork ✓
   • Valuation only: $200-$400

3. Total costs:

   • Portability fee: $0-$500
   • Valuation: $200-$400
   • Total: $200-$900

Savings: $7,200-$35,200

Real-World Portability Example

Scenario: Upgrading to a Larger Home

Your situation:

• Current property: $650,000 apartment
• Current loan: $480,000 remaining
• Fixed rate: 5.9% p.a. for another 2 years
• New property: $950,000 house

Option 1: Without portability (refinance)

Close old loan:

• Discharge fee: $350
• Break costs (2 years left on fixed): $14,800
• Subtotal: $15,150

New loan for $780,000:

• Application fee: $800
• Valuation: $300
• Legal fees: $1,800
• New rate: 6.4% p.a. (current market)
• Subtotal: $2,900

Total costs: $18,050 Plus: Higher rate costs $3,900/year more

Option 2: With portability

Port $480,000 to new property:

• Portability fee: $300
• Valuation: $300
• Keep 5.9% p.a. rate ✓
• Subtotal: $600

Top-up loan for $300,000:

• New loan at 6.4% p.a.
• Application fee: $600
• Subtotal: $600

Total costs: $1,200 Blended rate: 6.08% p.a. (weighted average)

Savings vs refinancing:

• Upfront: $16,850 saved
• Annual: $2,340/year saved (better rate)
• Over 2 years: $21,530 total saved

Types of Portability

Full Portability

What it means:

• Transfer entire loan to new property
• Keep all terms, rate, features
• No changes to loan amount

Example:

• Current loan: $500,000 on $700,000 apartment
• New purchase: $800,000 house
• Bring $300,000 from sale proceeds
• Port full $500,000 to new house
• No top-up needed

Process:

• Notify lender 30 days before settlement
• Lender values new property
• If satisfactory, approve port
• Transfer loan on settlement day

Partial Portability with Top-Up

What it means:

• Port existing loan
• Borrow additional funds for more expensive property

Example:

• Current loan: $450,000
• New property costs: $1,000,000
• Sale proceeds from old: $300,000
• Need to borrow: $700,000 total
• Port $450,000 + new loan $250,000

Two loan portions:

• Portion 1: $450,000 at old rate (5.9% p.a.)
• Portion 2: $250,000 at current rate (6.3% p.a.)
• Blended rate: ~6.05% p.a.

Benefits:

• Keep good old rate on bulk of loan
• Only pay current rate on top-up

Partial Portability with Reduction

What it means:

• Port reduced loan amount
• Pay down some principal from sale proceeds

Example:

• Current loan: $600,000 on $850,000 property
• Sell for: $900,000 (after costs)
• New property: $750,000
• Port only: $450,000
• Pay down: $150,000
• Lower loan balance, same great rate

Benefits:

• Reduce debt
• Keep existing rate
• Lower repayments

When Portability Makes Sense

1. You Have a Great Interest Rate

Scenario:

• You locked in 5.5% p.a. fixed 2 years ago
• Current rates: 6.5% p.a.
• 3 years remaining on fixed term

Without portability:

• Break costs: $22,000
• New loan at 6.5% p.a.
• Cost: $22,000 + higher rate

With portability:

• Keep 5.5% p.a. for remaining 3 years
• Port to new property
• Savings: $22,000 + $6,000/year (on $600K loan)

2. You're Upgrading Within 1-2 Years

Scenario:

• Bought starter apartment 2 years ago
• Now need family home
• Want to sell and upgrade

Without portability:

• Close 2-year-old loan
• Apply for entirely new loan
• Costs: $3,000-$5,000 in fees

With portability:

• Transfer 2-year-old loan seamlessly
• Costs: $300-$900

3. You Have a Fixed Rate Loan

Break costs can be huge:

Example:

• $700,000 fixed at 5.8% p.a.
• 4 years remaining
• Current fixed rates: 6.6% p.a.
• Break cost: $28,000 (lender's lost interest)

Portability avoids this:

• Transfer $700,000 to new property
• Keep 5.8% p.a. for 4 years
• Save $28,000

4. You Have Loan Features You Want to Keep

Features worth keeping:

• 100% offset account
• Unlimited extra repayments
• No monthly fees
• Redraw facility

Example:

• Your loan: Full offset, no monthly fee
• Current market: $395/year package fee for offset
• Port loan, avoid $395/year fee = $11,850 saved over 30 years

When Portability Doesn't Make Sense

1. Your Rate is Uncompetitive

Scenario:

• Current loan: 6.8% p.a. variable
• Current market: 6.0% p.a. available
• Loan balance: $550,000

Port vs refinance:

Port at 6.8%:

• Annual interest: $37,400
• Keep uncompetitive rate

Refinance to 6.0%:

• Annual interest: $33,000
• Discharge fee: $350
• New loan costs: $2,000
• Savings: $4,400/year - $2,350 costs = $2,050 net year 1
• From year 2 onward: $4,400/year saved

Verdict: Refinance (portability keeps you on bad rate)

2. You're Borrowing Significantly More

Scenario:

• Current loan: $400,000
• New property needs: $900,000 loan
• Top-up required: $500,000

Issues:

• Top-up is 56% of total loan
• Minimal benefit keeping old rate on 44%
• Better to refinance entire amount for best new rate

Example:

• Port $400K at 5.9% + new $500K at 6.5% = blended 6.24%
• Refinance entire $900K at 6.1% = better rate
• Refinancing wins

3. Lender Won't Approve New Property

Portability requirements:

• New property must meet lender's criteria
• LVR must be acceptable
• Valuation must stack up

Rejection scenario:

• Current: 80% LVR on apartment (acceptable)
• New: 92% LVR on house (too high for that lender)
• Lender declines portability
• Must refinance elsewhere anyway

4. Better Deals Available Elsewhere

Scenario:

• Your lender: 6.2% p.a., $395/year fee, basic features
• Competitor: 5.9% p.a., $0 fee, full offset

Port vs refinance:

Port:

• Keep 6.2% rate
• Keep $395 fee
• Save ~$2,000 in refinancing costs

Refinance:

• Get 5.9% rate (save $1,800/year on $600K)
• Save $395/year fee
• Better features
• Cost: $2,500 upfront
• Payback: 14 months, then save $2,195/year

Verdict: Refinance (better long-term outcome)

Portability Requirements and Conditions

Lender Approval Required

What lenders check:

1. New property valuation

   • Must meet or exceed purchase price
   • Must be acceptable security

2. Your financial situation

   • Income still sufficient
   • No change to employment
   • Credit score still good

3. Loan-to-Value Ratio (LVR)

   • Must be within lender's policy
   • Usually max 90% (some 95%)

4. Timing

   • Usually must complete within 90 days
   • Some lenders allow 6-12 months

Example approval:

• Current: $500,000 loan on $625,000 property (80% LVR)
• New: $500,000 loan on $650,000 property (77% LVR)
• Income: Still $140,000/year
• Employment: Same employer
• Approval: Automatic ✓

Example decline:

• Current: $500,000 loan on $625,000 property (80% LVR)
• New: $500,000 loan on $520,000 property (96% LVR)
• Lender declines (LVR too high)

Timing Windows

Most lenders require:

• Sell and buy within 90 days
• Some allow up to 6 months
• A few allow 12 months

Example timeline:

• March 1: List property for sale
• April 15: Accept offer, 60-day settlement
• April 20: Find new property, make offer
• May 1: New property accepted, 45-day settlement
• June 15: Both settlements on same day
• Perfect: Within 90-day window ✓

Tricky scenario:

• Sell current property: Settle June 1
• Can't find new property until September
• 91 days later: Outside portability window
• May need to refinance or request extension

Property Type Restrictions

Usually acceptable:

• Houses, townhouses, apartments
• Established properties
• New builds (sometimes)

May be declined:

• Studio apartments (under 40sqm)
• Properties in remote areas
• High-density developments (over 10 stories)
• Properties with known issues

Example:

• Port from: 2-bed apartment in CBD
• Port to: 4-bed house in suburbs
• Approved ✓

Example:

• Port from: 3-bed house
• Port to: Rural property on 10 acres
• Declined (lender doesn't do rural)

Portability Fees and Costs

Typical Costs

Portability fee:

• $0-$500 (varies by lender)
• Some lenders: Free
• Others: Flat fee

New property valuation:

• $200-$400
• Required by lender

Legal fees:

• $500-$1,200
• Transfer loan to new title

Optional costs:

• Top-up application fee: $0-$800
• LMI (if new LVR over 80%): Variable

Example total:

• Portability fee: $300
• Valuation: $250
• Legal: $800
• Total: $1,350

Compare to refinancing:

• Discharge: $350
• Break costs: $12,000
• New application: $800
• New valuation: $300
• New legal: $1,800
• Total: $15,250

Portability saves: $13,900

Hidden Savings

No new application:

• Save time (weeks of processing)
• No risk of rejection
• No new credit inquiry

Keep existing rate:

• If rate is good, save thousands annually
• Fixed rate: Avoid break costs

Keep loan features:

• Offset account
• Redraw facility
• No ongoing fees (if grandfathered)

Example:

• Old loan: No monthly fee (grandfathered)
• New loan: $395/year package fee
• Portability saves $395/year = $11,850 over 30 years

Step-by-Step: How to Port Your Loan

Step 1: Check Loan Contract (60-90 Days Before)

Review your loan terms:

• Does your loan have portability?
• What are the conditions?
• Any fees?

Where to check:

• Loan contract (Product Disclosure Statement)
• Call lender
• Check online banking

Example:

• Loan contract: "Portability available, $300 fee, must complete within 90 days"
• You have portability ✓

Step 2: List Current Property for Sale

Typical sale timeline:

• List property: Week 1
• Accept offer: Week 3-6
• Settlement: 6-8 weeks later
• Total: 9-14 weeks

Coordinate with purchase:

• Ensure you can find new property within portability window
• Some buyers rent short-term between sale and purchase

Step 3: Notify Lender of Intent to Port (30+ Days Before)

Contact lender:

• Call or email
• Provide: Sale contract, estimated new property price
• Request: Portability approval in principle

Lender response:

• Confirm portability available
• State requirements (valuation, LVR, etc.)
• Issue approval timeline

Example:

• You: "I'm selling my property and buying a new one. I'd like to port my $520,000 loan."
• Lender: "No problem. We'll need a valuation on the new property and confirmation your LVR is acceptable. Portability fee is $350."

Step 4: Find and Purchase New Property

Timeline coordination:

• Ideally: Settle sale and purchase on same day
• Or: Within 90 days of each other

Submit to lender:

• Contract of sale (new property)
• Request formal portability approval

Step 5: Lender Assessment

Lender orders:

• Valuation of new property
• Credit check (may not be required)
• Income verification (if employment changed)

Assessment time:

• 1-2 weeks
• Faster than new loan application

Example:

• Submit: April 1
• Valuation: April 5
• Approval: April 10
• Settlement: May 15
• Plenty of time ✓

Step 6: Settlement

On settlement day:

• Old property: Loan transfers off title
• New property: Loan transfers onto title
• Loan continues uninterrupted

No gap in loan:

• If same-day settlement: Seamless
• If different days: Lender may bridge temporarily

Example:

• 10am: Sell old property, loan discharged from old title
• 2pm: Buy new property, same loan secured on new title
• Same loan, new security

Portability vs Refinancing: Full Comparison

When to Port

Port your loan if:

• ✓ Rate is competitive or better than market
• ✓ Fixed rate with break costs over $5,000
• ✓ Great loan features you want to keep
• ✓ Buying within portability window
• ✓ Simple transfer (similar property, LVR)

Example:

• Loan: $600,000 at 5.7% p.a. fixed
• Current fixed rates: 6.4% p.a.
• Break costs: $18,000
• Port loan, save $18,000 + keep better rate

When to Refinance

Refinance instead if:

• ✓ Current rate 0.5%+ higher than market
• ✓ Better deals available (lower rate, better features)
• ✓ Borrowing significantly more (large top-up)
• ✓ Outside portability window
• ✓ Current lender won't approve new property

Example:

• Loan: $550,000 at 6.7% p.a.
• Best refinance rate: 6.0% p.a.
• Annual saving: $3,850
• Refinance costs: $2,500
• Refinance, save $1,350 year 1, $3,850/year after

Lenders That Offer Portability

Major Banks

CBA, Westpac, NAB, ANZ:

• All offer portability
• Conditions vary
• Fees: $0-$500

Regional Banks

Bendigo, BOQ, Suncorp:

• Usually offer portability
• Check individual terms

Non-Bank Lenders

Variable:

• Some offer portability
• Others don't
• Must check with specific lender

Example lenders with portability:

• AMP
• Heritage Bank
• People's Choice Credit Union

Example lenders without portability:

• Some online-only lenders
• Some specialist lenders

How to Check

Before you borrow:

• Ask: "Does this loan have portability?"
• Read PDS (Product Disclosure Statement)
• NIK Finance comparison shows which loans have portability

Already have a loan:

• Check loan contract
• Call lender
• Online banking FAQ section

Portability and Investment Properties

Porting Investment Loans

Allowed:

• Investment → investment (easy)
• Owner-occupier → owner-occupier (easy)

Tricky:

• Investment → owner-occupier (may change rate/terms)
• Owner-occupier → investment (may require refinance)

Example:

• Current: Owner-occupier loan at 5.9% p.a.
• Sell and move: New property also owner-occupier
• Port easily ✓

Example:

• Current: Owner-occupier loan at 5.9% p.a.
• Convert old property to investment, buy new owner-occupier home
• May need to refinance (loan purpose changed)

Tax Implications

Investment property portability:

• Interest remains tax-deductible
• Loan purpose unchanged
• No ATO issues

Owner-occupier to investment:

• Consult accountant
• May affect deductibility
• Loan purpose matters for tax

Common Portability Questions

Can I port if I'm buying a more expensive property?

Yes, with a top-up:

• Port existing loan
• Add new loan for difference
• Two loan accounts, one lender

Example:

• Port: $500,000 at 5.8% p.a.
• Top-up: $200,000 at 6.3% p.a.
• Blended rate: 5.94% p.a.

Can I port if my income has changed?

Depends:

• Income increased: Usually fine
• Income decreased: Lender reassesses serviceability

Example:

• Original loan: Approved at $120K income
• Current income: $150K
• No issues ✓

Example:

• Original loan: Approved at $120K income
• Current income: $90K (job change)
• Lender reassesses: May decline or reduce loan amount

What if the new property doesn't value?

Lender ordered valuation comes in low:

• Purchase price: $800,000
• Valuation: $750,000
• LVR based on: $750,000
• May require larger deposit or decline portability

Can I port between states?

Yes:

• Most lenders allow interstate portability
• Same lender, different state
• Legal fees may be higher (different state laws)

Example:

• Current: Melbourne property
• New: Brisbane property
• Same lender: NAB
• Portability approved ✓

Final Thoughts

Portability is one of the most valuable yet underutilized loan features:

• Saves $10,000-$35,000 in fees and break costs
• Keeps your great rate (if better than market)
• Faster process than refinancing (1-2 weeks vs 4-6 weeks)
• Less paperwork and hassle

When portability shines:

• Fixed rate loans (avoid break costs)
• Great rates locked in
• Simple property upgrade
• Settlement timing aligns

Check your loan today:

• Do you have portability? (Read PDS or call lender)
• Planning to move in next 1-3 years? (Factor portability into decision)
• Choosing a new loan? (Prioritize portability if you might move)

NIK Finance helps you:

• Compare loans with portability features
• Calculate break costs vs portability savings
• Find lenders with best portability terms
• Compare 100+ lenders and filter by portability

Remember:

• Portability saves thousands
• Not all loans have it
• Check before you borrow
• If you might move within 5 years, portability is essential