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Blended Mortgage

Understand blended mortgages in Canadian real estate — what they are, when they’re used, and their advantages for borrowers.

Blended Mortgage

July 27, 2025


What is a Blended Mortgage?

A blended mortgage combines two different mortgage loans or interest rates into one, resulting in a new single loan with a blended interest rate.

Why Blended Mortgages Matter in Real Estate

In Canadian mortgage financing, blended mortgages help borrowers modify financing without full refinancing, often during porting or top-up situations.



Key features:
  • Mixes existing loan with new funds
  • Creates an average (blended) interest rate
  • May avoid penalties for breaking existing mortgage



Understanding blended mortgages helps homeowners manage changing financing needs.

Example of a Blended Mortgage in Action

The homeowner used a blended mortgage to combine their existing loan with additional funds for a home addition.

Key Takeaways

  • Combines old and new mortgage loans
  • Creates a blended interest rate
  • Useful for adding funds or porting
  • May reduce penalty costs
  • Supports flexible financing

Related Terms

Additional Terms

Recourse Loan

A recourse loan is a type of loan where the lender can pursue the borrower’s personal assets, beyond the collateral, in the event of default.. more

Pari Passu

A pari passu clause is a contractual provision ensuring that multiple creditors share equally in repayment priority from the borrower’s assets.. more

Non-Recourse Loan

A non-recourse loan is a type of loan where the lender’s only remedy in case of default is to seize the collateral property; the borrower is not. more

Net Operating Income

Net operating income (NOI) is the total income generated by a property after operating expenses are deducted but before taxes and financing costs.. more

Mechanic's Lien

A mechanic’s lien is a legal claim by a contractor, subcontractor, or supplier for unpaid work or materials provided for a property.. more

Lis Pendens

Lis pendens is a legal notice filed in the land registry indicating that a property is subject to ongoing litigation that may affect its title.. more

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