Blended Mortgage
Understand blended mortgages in Canadian real estate — what they are, when they’re used, and their advantages for borrowers.
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
Canadian respondents were more likely to expect an undersupply of development/redevelopment equity capital (63%) than debt capital (46%) in 2027. These are survey expectations, not measured financing volumes. Source: PwC and ULI, Emerging Trends in Real Estate 2027, pp. 136–137. Original chart.
Toronto census metropolitan area housing starts fell from 37,718 units in 2024 to 26,087 in 2025, a 30.8% decline (rounded to 31%). Starts measure construction begun, not completed homes. Source: CMHC, as cited in PwC and ULI, Emerging Trends in Real Estate 2027, p. 145. Original chart.
Illustrative calculation: a $4.5-million value ceiling versus income-based capacity of about $4.25 million at 4%, $3.62 million at 5% and $3.13 million at 6%. Assumes 50-year amortization and 1.15 debt coverage.
Source: Department of Finance missing-middle backgrounder and Budget 2026 Chapter 3, November 5, 2026. Fiscal-year funding starts are not home-completion dates.
