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Combination Mortgage Fixed and Variable Rate

Variable Rate and Fixed Rate Mortgage Together

A Combination Mortgage loan is a new mortgage product that is half variable mortgage and half fixed rate mortgage. The mortgage is registered as one mortgage loan against the home but they actually have two interest rate settings.  Thy operate independently of each other so you can choose to make pre-payments on the fixed portion or you can choose to pay down the variable rate mortgage more assertively. This is considered a blended effective rate mortgage with a purpose to save on the variable rate side of the mortgage and get security on the fixed part of the term. The theory is to use this product to hedge against rising interest rates. If the bank prime rate goes up only then only half of your mortgage portfolio is exposed. This is best for clients who are unsure whether to go with a variable or fixed mortgage. This product eliminates the biggest dilemma facing mortgage borrows in today’s economy. Call our office to find out if this mortgage loan product is right for you.