What are Blended Mortgages?
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?
Simple, its name comes from the fact that you blend the interest rate on your existing mortgage with the interest rate of a new mortgage, more than likely an interest rate being offered at a lower rate.
A blended mortgage is available to those who wish to gain access to the equity they’ve built up as well as those who want to take advantage of a lower interest rate to save money.
The Blend and Extend
The blend and extend option means you’ll blend your existing interest rate with the interest rate your lender currently offers to get a new interest rate somewhere in between. Then your lender will give you a new term by extending it back to its full length.
