“A Toronto 50/50 Mortgage Can Provide The Best Of Both Worlds”
The Toronto 50/50 mortgage products provided by many lenders for a residential home mortgage can be an excellent fit for the risk appetite of certain borrowers.
Before going any further, let’s first define what a 50/50 mortgage is.
While each 50/50 mortgage program can be slightly different, the basic structure of these mortgage is as follows:
- The principal of the mortgage is equally divided between a fixed and variable rate ( or the mortgage program allows you to adjust the percentage). The effective result is a blended mortgage rate that will change over time if the variable rate moves up or down.
- You will be making two different payment amounts with most programs allowing you the option to increase one of the payments to fit your cash flow objectives while leaving the other one unchanged.
- The variable portion can be converted to a fixed rate at any time without any penalty.
- Most programs will offer a 20% prepayment option on the total mortgage outstanding without any prepayment penalties applied.
For those individuals that what some interest rate protection but still want some variability in their mortgage terms that will allow them to adjust their mortgage to fit any changes in their future cash flow or financial objectives, the 50/50 mortgage can be an excellent product to sign up for.
Basically, it does the best job in the market of giving you the best of both the fixed and variable rate worlds.
Once again, there will be some slight differences from one 50/50 mortgage program to another in terms of the features and options provided to you.
If a Toronto 50/50 mortgage is a type of mortgage product that you have some interest in or would like to know more about, give us a call and book a time to speak with a member of our team in order to get all your questions answered.
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