Transfer of mortgages from one provider to another
Selling mortgage loans is common in the mortgage industry, but the terms and conditions of your original loan are protected by law. They can’t be changed, including your interest rate and repayment period. Also, your credit rating will not be affected by the sale.
If you have a fixed rate mortgage, your monthly payments will continue to be the same. If you have a variable rate mortgage, your payments will be subject to change, based on the terms of the original loan.
If your loan is sold, then the new owner of your loan must notify you of the transfer as soon as the details are known. The notice will disclose the name, address, and telephone number of the new owner (and, if different, the person who can resolve issues concerning your loan payments or any right to rescind the loan), the date of transfer. Just because your loan is sold does not mean that your servicing right is sold and that you will get a new servicer.*
Following the transfer the usual rules around notice of changes to the terms of the mortgage will apply so the new lender must give the customer reasonable notice, in advance, of:
- any changes to the payments that the customer is required to make resulting from interest rate changes; and
- any material change by the firm to the terms and conditions of the regulated mortgage contract, where that change is permitted without the customer's prior consent.
*A mortgage servicer is a company to which some borrowers pay their mortgage loan payments and which performs other services in connection with mortgages – sometimes called the third party administrator.