Loan portability lets your client keep an existing home loan while replacing the property that secures it. Trail usually continues when the lender retains the same loan and commission entitlement. Porting can also avoid an early-payout clawback, but the lender’s commission terms decide that outcome.
How Loan Portability Works
Loan portability moves the security for an existing loan from the property being sold to the property being purchased. The lender releases its mortgage over the old property and takes a mortgage over the new one. The debt continues under the approved arrangement.
Substitution of security, security substitution and a security swap describe this process. A borrower asking to transfer a home loan to another property, or arrange a mortgage port, is usually asking about the same feature. The lender stays the same.
For example, a client selling a unit can keep their loan against a replacement house if the lender accepts that house as security. A simultaneous settlement lets the lender release one property as it takes the other. If the settlements differ, a lender-approved temporary security arrangement must cover the gap.
Portability does not transfer the debt to the person buying the old property. Your client remains responsible for repayments.
Does Trail Continue When a Client Ports a Loan?
Yes, trail usually continues if the lender keeps the existing loan and preserves your commission entitlement through the security change. Releasing the old property’s mortgage does not itself mean the loan has been repaid. Record the continuing account and its broker attribution before treating the move as complete.
The lender’s credit approval and its commission treatment are separate decisions. Commission treatment differs by lender and agreement. Before the client signs, obtain written confirmation from the lender’s commission team that the proposed port preserves trail and avoids a payout-triggered clawback. Include any period when cash replaces property as security in that request.
A larger purchase can also require extra borrowing. Distinguish the existing balance from the increase: additional trail depends on the eligible balance, while upfront depends on the lender’s top-up or new-lending rules. A security change alone does not justify assuming another full upfront payment.
Ask the commission team to identify any eligible increase, its upfront calculation and whether the original broker retains trail. A replacement account or another broker’s involvement needs an explicit account and entitlement record.
Porting vs Discharging: Clawback and Costs Compared
Porting preserves an eligible existing loan, while discharging and reapplying ends one loan and creates another. Compare the client’s total cost separately from the broker’s commission outcome.
| Item | Port the Existing Loan | Discharge and Apply Again |
|---|---|---|
| Existing trail | Usually continues under the continuing loan’s terms | Ends on the repaid debt |
| Clawback | Confirm the security change is not a contractual recovery event | Early repayment can trigger recovery within the applicable period |
| New upfront | Do not assume payment on the retained debt | Depends on eligible new lending and the lender’s commission rules |
| Fixed-rate break costs | Can be avoided where the fixed loan continues unchanged | Early repayment can incur a break cost |
| Client fees | Security, valuation and registration costs can remain | Discharge and new application costs can apply |
| Lenders mortgage insurance (LMI) | Insurer approval can still be required | A new loan can require a new premium |
See the clawback periods and charging rules when calculating the old loan’s exposure. If the existing rate is the concern, assess repricing with the same lender alongside the move.
A Simple Porting Cost Calculation
A loan portability calculator is unnecessary for a first comparison. Add the costs of each option, then compare interest over the same period.
In this hypothetical example, assume the balance stays unchanged and both options have the same interest cost. All figures are illustrative totals paid by the client, not quoted lender fees.
| Client Cost | Port | New Loan |
|---|---|---|
| Security change costs | $400 | $0 |
| Discharge costs | $0 | $350 |
| Break cost | $0 | $2,000 |
| Application costs | $0 | $600 |
| Total | $400 | $2,950 |
The new loan costs $2,550 more upfront: $2,950 minus $400. If it saves $100 a month in interest, recovering that difference takes 25.5 months. Add any LMI premium to the relevant option before calculating the difference.
Separately, suppose the broker’s original upfront was $3,000 and the applicable clawback is 50%. The potential debit is $1,500. That broker cost stays separate from the client’s comparison and does not decide which loan meets the client’s needs.
Substitution of Security Step by Step
Arrange substitution of security before settlement so the existing loan remains secured throughout the move.
- Confirm the loan is portable. Give the lender the existing account details and proposed transaction. Obtain approval for the product and any temporary security arrangement before relying on portability.
- Check the new property’s value and loan-to-value ratio (LVR). Divide the secured loan amount by the lender’s assessed property value. A $500,000 loan against a $700,000 valuation has an LVR of about 71.4%. Obtain any required valuation and insurer consent.
- Lodge the lender’s request. Supply property details, contracts and settlement instructions. State clearly that the existing loan must remain open. Complete any extra borrowing assessment separately where required.
- Coordinate settlements with the lender and conveyancer. Obtain approval before changing the sequence. For a simultaneous settlement, both property transactions must complete together under the lender’s instructions.
- Confirm completion. Ask the conveyancer to confirm registration of the new mortgage and release of the old security. Match the continuing loan account to the lender’s confirmation and your commission records.
If the sale settles first, arrange approved cash security before releasing the property. The client continues making repayments while the cash secures the loan. Do not assume the sale proceeds are available to spend.
If the purchase settles first, assess the bridging finance options separately. If the lender cannot approve the timing or replacement security, follow the mortgage discharge process for the replacement lending arrangement.
Westpac and St.George Property and Security Request Forms
Westpac and St.George use a Property and Security Request form for eligible security changes, including portability. Choose the instruction that keeps the loan open when substituting security. A request to release security and close the account produces a different result.
Westpac
Brokers can find the request through Westpac’s portability application instructions. Provide the lending representative’s details, property information and settlement timing. Request that the loan stays open and enter “Application for portability” under Additional information.
Westpac’s Property and Security Request signing instructions require all parties and guarantors to sign. Use the portability instructions for the transaction itself, even though the signing guidance also covers account closure.
The request tells Westpac which security to release and replace. If the transaction also adds security, identify the additional property in the instructions and obtain the lender’s approval for the whole arrangement.
St.George
Use the form linked from St.George’s portability page. Enter the existing and replacement property details. Select “No” for “Will the loan be closed?” and put “Application for loan portability” under Additional information.
St.George instructs applicants to download, print and sign the completed form before returning it. Its Property and Security Request guidance says all account holders and guarantors must sign. Preserve the keep-open instruction when arranging the signatures.
Lender Rules That Decide Whether a Port Works
Settlement timing and the amount being borrowed decide whether many portability requests can proceed. Product exclusions and security requirements can also rule out a move that looks straightforward.
| Lender | Timing and Borrowing Conditions | Costs or Other Restrictions |
|---|---|---|
| Westpac | Same-time settlement or approved term-deposit security for up to six months. Finalise a pending loan increase first. | An unchanged fixed loan can avoid break costs. Commercial substitute security, existing bridging loans and specified products are excluded. |
| St.George | Same-time settlement or a term deposit for up to six months, reduced to three months where the existing loan has LMI. | Construction and existing relocation or bridging loans are excluded. |
| CommBank | Simultaneous settlement, with temporary cash security considered case by case where purchase follows sale within 90 days. | Its guide lists a $300 substitution fee per security. LMI requires insurer approval. Extra borrowing can require a new application. |
| Macquarie | Both properties must settle on the same day. The facility limit cannot increase within the substitution request. | Credit assessment applies. Allow up to 28 days. Substitution is typically unavailable for accounts with a BSB starting 183. |
These conditions come from the lenders’ own portability guidance, including CommBank’s substitution guide and Macquarie’s security substitution process.
ANZ’s security swap rules require the same or a lower borrowing amount and unchanged borrower names. ANZ generally requires simultaneous settlement, with an approved term deposit possible when the sale settles first. Mortgage registration fees still apply. Its guide excludes ANZ Plus products.
A portable home loan still needs an acceptable replacement property. A loan increase can require full assessment, and a change to a fixed loan can create break costs. Obtain the written fee estimate for the actual transaction before comparing it with a new loan.
Check Trail After the Move
Compare the next two trail statements with the last statement before settlement. Confirm the loan remains present and match its account reference to the lender’s portability confirmation. Compare the eligible balance and payment period before treating a smaller payment as missing trail.
If trail stops, ask the aggregator to trace the continuing account. Supply the settlement confirmation, relevant statements and the written commission treatment. Identify whether the lender recorded a payout, changed the account reference or omitted a payment.
Track My Trail’s Missing Trail Analysis flags loans whose trail stopped and later reappeared, separately from clients who discharged. Use that history to identify the unpaid periods and raise the gap with the aggregator. Pro Performance covers the most recent two years, while Elite Suite covers the full stored history.
Keep the case open until the account is correctly attributed and the aggregator has explained or corrected the missing payments.
