From the day we sign our mortgage papers, the market is never the same. In some cases market fluctuations aren’t a big deal for borrowers. On the other hand, strong market shifts can make a difference and directly effect mortgage interest rates.
If it’s time for you to refinance your mortgage and you notice that the interest rate has dropped tremendously since you negotiated your terms, or you’re not gainfully employed but you’re not sure if you want to refinance completely, there is hope. That hopes comes in the form of a blended rate mortgage.
This type of mortgage is named as such because it is a combination of your old mortgage and a new loan amount. It is often seen as an alternative to refinancing because the new loan amount is added to your current mortgage.
Instead of taking out a new loan entirely, you can turn two home loans into one and save on the additional interest costs that would accompany refinancing. With a blended rate mortgage, you cannot transfer it to another property if you move; it can only be used for your current home.
Blended rate mortgages provide homeowners with many benefits besides saving you money on the extra interest costs associated with refinancing.
If you’re unsure as to whether or not you should take on a blended rate mortgage, talk to your broker. These mortgages offer many of the aforementioned benefits, but they are not suited for everyone’s financial situation. Your mortgage broker can offer insights and information regarding refinancing and if switching to a blended rate is the right choice for you.Back
Canada’s mortgage website
Your home is your most valuable asset. It is probably the single largest investment you will make in your lifetime. Your home is more than a place to rest your head and raise a family. Your home contains equity. It is a treasured resource and in some cases, can even be used as an ATM (aka cash back mortgages and HELOCs – don’t worry we’ll get there).
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