Mortgage Portability and Substitution of Security in Australia

Short answer

Mortgage portability, also called a substitution of security or security swap, is a lender-approved process that replaces the property securing an existing home loan.

It may let a borrower keep the same loan account, rate or fixed-rate period while selling one home and buying another. It is not an automatic right, a transfer of property ownership or a way to avoid credit assessment.

Lender rules differ. Some require the sale and purchase to settle on the same day. Some products may allow an approved cash or term-deposit security arrangement between settlements. Ask the lender to confirm the process, timing, valuation, fees and loan limits in writing before committing to dates.

Use the Mortgage Repayment Calculator to compare entered loan balances and rates. The result is an estimate, not a portability approval or lender quote.

What is being moved

A mortgage is the lender's registered security over a property. With a substitution, the borrower asks the lender to release the old property and accept the new property as security for the existing loan.

The loan is not being transferred to the buyer of the old home. The borrower remains responsible for it, subject to the lender approving the change.

Lenders use several names for the process:

• mortgage portability;
• home-loan portability;
• substitution of security;
• security substitution; and
• security swap.

The terms usually describe the same broad idea, but the product conditions can differ.

Approval is still required

An existing repayment history does not guarantee approval. The lender may review:

• the new property's valuation and acceptability as security;
• the resulting loan-to-value ratio;
• the borrower's income, expenses and liabilities;
• whether the current product allows a substitution;
• the amount and purpose of any additional borrowing;
• lenders mortgage insurance requirements;
• title, contract and settlement details; and
• whether sale and purchase dates meet the lender's process.

ANZ says its security swap remains subject to credit assessment. Macquarie says approval is required and both properties generally need to settle on the same day under its process.

A lender can decline the proposed property or require a lower balance, more equity, a changed limit or a new loan application.

Same-day and different-day settlements

The simplest structure is usually a coordinated sale and purchase settlement. The old security is released as the new security is registered.

Timing becomes more complicated when the old home settles first. Some lenders offer a deferred-settlement process where approved sale proceeds are held as cash or a term deposit securing the loan until the replacement property settles. Conditions and time limits are lender-specific.

If the new home settles first, a borrower may instead need bridging finance, another property as temporary security or enough cash to complete the purchase. These are different arrangements with different risks and assessments.

Do not exchange contracts on the assumption that settlement dates can be changed or that portability will be approved. A conveyancer can coordinate the property settlements, while the lender or licensed credit professional can explain the credit process.

A worked example

Assume a homeowner has:

If the lender accepts the replacement property as security, the existing $480,000 loan may be capable of continuing. The additional $70,000 is not automatically added. It may require a separate application, serviceability assessment, valuation and product decision.

Sale proceeds also need to cover selling costs, settlement adjustments and the cash contribution required for the replacement purchase. Stamp duty and buying costs still apply to the new property.

Run the entered purchase through the Property Purchase Cost Calculator and estimate sale deductions with the Property Selling Costs Calculator. Neither result confirms that the transactions can settle.

Potential benefits

Subject to the loan contract and lender approval, a security substitution may:

• preserve an existing loan account and repayment history;
• keep a current fixed-rate period or product features;
• avoid closing the full loan and establishing a replacement facility; and
• reduce some refinancing or fixed-rate break costs.

These are possible benefits, not guarantees. Registration, valuation, settlement, variation and legal charges may still apply.

Costs and trade-offs to check

Ask for a written list of:

• substitution or variation fees;
• valuation fees;
• state or territory mortgage registration and discharge charges;
• electronic settlement and legal costs;
• any fixed-rate break cost if the balance or product changes;
• lenders mortgage insurance implications; and
• fees or rate changes attached to extra borrowing.

Compare the result with refinancing, keeping in mind that a lower repayment can come from extending the loan term rather than receiving a better rate. Use the Refinance Break-Even Calculator with confirmed switching costs for a separate estimate.

Fixed-rate loans need special care

Portability can be useful where a borrower wants to retain an existing fixed-rate period. ANZ and CommBank describe avoiding a full loan closure as a potential way to avoid an early repayment cost.

A break cost can still arise if part of the fixed balance is repaid, the product is changed, settlement conditions are not met or the substitution cannot proceed. Only the lender can calculate a dated break cost under the contract.

Questions to ask before applying

1. Does this exact loan product allow a substitution of security?
2. Will you reassess income, expenses and serviceability?
3. Must sale and purchase settle on the same day?
4. Is temporary cash or term-deposit security available if the sale settles first?
5. What valuation and loan-to-value limits apply to the new property?
6. What happens if the new property is worth less than expected?
7. Can the current balance, rate, term, offset and loan splits remain unchanged?
8. How is additional borrowing assessed?
9. Which lender, registry, settlement and legal fees apply?
10. What dates and documents must the conveyancer coordinate?

When a full refinance may still be relevant

A substitution keeps an existing facility. It may not solve a high rate, unsuitable features, poor loan structure or the need for a substantially different balance.

A borrower comparing options should consider the remaining loan term, total interest, fees, offset or redraw rules and fixed-rate consequences. The Loan Comparison Calculator can compare entered figures, but it does not assess product suitability or eligibility.

Sources

• ANZ: New home, same loan, the security swap option, including credit-assessment and fixed-rate context. Checked 14 August 2026.
• Macquarie: Substituting the security of your home loan, including approval and same-day settlement requirements for its process. Checked 14 August 2026.
• CommBank: Substitution of security guide, including process, valuation and settlement risks. Checked 14 August 2026.
• St.George: Portability and your home loan, including an example of lender-specific deferred settlement security. Checked 14 August 2026.

General information disclaimer

This guide provides general information only. It is not financial advice, credit advice, legal advice, a loan offer, an approval or a recommendation. Availability, assessment, timing, fees and acceptable security vary by lender, product and borrower. Confirm the current requirements with the lender and obtain conveyancing or other licensed professional advice before entering contracts.

Last updated: 14 August 2026.