A mortgage transfer is when a home owner switches their existing mortgage to a new lender but is not adding on any additional funds (penalties, discharge fees, accrued interest, legal fees do not apply). In this scenario, someone will typically switch their mortgage at maturity for a better interest rate and mortgage product or switch prior to maturity and cap penalties into the new mortgage. Different rules and guidelines apply, depending on the mortgage product and lender so it is very important to talk to a mortgage professional to navigate you through the process.
A mortgage switch/transfer can be extremely beneficial because in most cases the legal fees and appraisal costs are paid by the new lender and the mortgage remains insurable, meaning a lower interest rate for the borrower. Many home owners may not even realize they are eligible for a mortgage transfer but instead are told to refinance which can lead to unnecessary costs and higher interest rates.