With accurate information, you will have a reliable result. Connect with us at Altrua and we can help you walk through the math to see if it makes sense to blend your mortgage or break and restart your mortgage at a much lower rate. We will quote you the best blended mortgage rates available in the market.
Our mortgages are not only the best rates but include excellent fine print and flexibility for when you need it down the road. Excellent, full feature mortgage with lots of fine print flexibility. High ratio only for this rate. Low penalties to break if you sold your home during the term. Apply for more info. High ratio mortgage with excellent fine print flexibility. Generous prepayment privilege and portable to a different home, without breaking the mortgage if you move. Refinance during the term with the same lender, by adding to the mortgage amount.
Apply today for more information. High ratio variable rate with excellent fine print flexibility. Excellent, full feature mortgage that provides a very flexible two-year term. For moving in 2 years to pay out the mortgage with NO penalty this is an excellent choice. Mortgage can also be renewed in two years without any legal fees to switch.
Non-collateral mortgage. Fully portable to a different home. Low penalty to break. This is a full feature mortgage that contains excellent fine print, and the ability to renew the mortgage after 1 year at the lowest rates, or pay the mortgage out in full with NO penalty. Naturally, as with all approaches to hedging and swaps, there are pros and cons to a blend-and-extend transaction.
A benefit from doing a blend-and extend on a swap which is a liability, is that short term cash outlays go down immediately. For instance, by spreading a two-year liability over five years, less cash goes out the door each period, though the total term of the liability increases. Additionally, a longer term means the protection from increasing rates provided by the swap remains in place for longer.
A swap that is an asset can be restructured similarly to spread the asset value over a longer term via a blend-and-extend transaction, increasing cash outflows, but extending the period of fixed rate protection. To be quite honest, choosing a five year fixed rate mortgage was more than likely the best option at the time and the most responsible decision to make. But, we do understand just how frustrating it can be to wish that you had made a different decision, particularly when it comes to such important and expensive things like a mortgage.
A blended mortgage is a way for borrowers to take advantage of a better rate or to gain access to their equity without having to fork over penalty fees for breaking their mortgage contract early. So why is it called a blended mortgage? Its name comes from the fact that you blend the interest rate on your existing mortgage with the interest rate of a new mortgage i. Can my mortgage renewal be denied? Learn more about mortgage renewal here. Then your lender will give you a new term by extending it back to its full length.
Your new mortgage contract will end when your original term is supposed to end. Why do different lenders offer different mortgage rates? Read here.
As interest rates are so hard to predict, it can be very difficult to say for certain which option is a better choice. The blend to term option will allow you to renegotiate your interest rate within a shorter time frame if your term ends and interest rates have remained low you could potentially receive an even lower rate and therefore save even more money.
On the other hand, the blend and extend provides more stability. Interested in how much it costs to purchase a house in your city? Click here. Aside from gaining access to your equity or to take advantage of a lower interest rate, the main and probably best reason to choose a blended mortgage over a more traditional refinancing is to avoid the fees associated with breaking a mortgage contract.
A blended mortgage is a great way to avoid these fees. When you break a mortgage contract your lender will charge you fees based on whichever one of the following two calculations is greater, three months interest or the Interest Rate Differential IRD. Typically, the cost of the IRD negates the change in interest rate and therefore breaking their mortgage contract does not make sense.
If this is the case for your mortgage, it could, in fact, be financially beneficial to break your contract. Is the interest on your mortgage tax-deductible in Canada?
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