What Happens to My Mortgage When I Sell My Sudbury Home? | Expert Breakdown
What happens to your mortgage when you sell your Sudbury home?
Your mortgage is paid off on closing day using the proceeds of your sale. Sudbury realtor Tanya Vanden Berg explains how the process works and what sellers should prepare for before listing.
When your home sells, your lawyer requests a mortgage payout statement from your lender. This document shows the exact amount needed to close your mortgage, including any remaining balance and potential penalties. The buyer’s funds go to your lawyer, who uses them to pay off the mortgage first. Whatever’s left becomes your sale proceeds.
If you’re still in your mortgage term, you may face prepayment penalties. These can be either three months’ interest or an interest rate differential (IRD), depending on your mortgage type. Tanya always recommends contacting your lender early so you understand your potential penalty before pricing your home.
Some Sudbury sellers consider porting their mortgage, which means transferring your current rate and term to a new property. This can be helpful if your rate is lower than today’s rates and you’re buying another home in the region.
Timing also matters. If your mortgage renews soon, selling after renewal may reduce penalties. Tanya helps sellers coordinate timing so the financial side feels as smooth as the selling side.
