The Made to Measure Mortgage
Today we’re going to talk about the hybrid mortgage. Now, this is something that not a lot of people have heard about but it’s something that we use commonly for people who can’t decide what type of mortgage they want to be in. Or people who maybe want the flexibility of a variable, but a little bit of security of the fixed and want the best of both worlds.
So the hybrid mortgage is offered through several lenders. Lenders like National Bank, lenders like Scotiabank, and what they allow you to do is instead of picking one type of mortgage, they allow you to mix and match and have certain percentages of different mortgages. So let’s say, for example, that you can’t decide whether you want a five year fixed mortgage or a variable rate mortgage. Maybe your husband or wife wants the variable, you want the security of the fixed and you’re at an impasse.
Well, what you can do is instead of having to pick one or the other, you can choose to do multiple mortgages. So let’s say you’ve got a $300,000 mortgage and you decide that instead of going all fixed you want to go 50, 50. So first 50% is your variable rate, then the second 50% is your fixed rate. With a hybrid type mortgage, you can choose to do this. And depending on the lender, you can even choose to go further than that. You could go 70, 30 variable or fixed, you could go 90% variable and 10% fixed. Or in some cases what you could do is you could split it up into three or four portions.
Maybe what you want is a variable rate for a quarter percent, quarter the mortgage. Maybe you want a two year at 2.29% for part of the mortgage. Maybe you want a five year for 2.59% and then maybe for the last 25% you want a line of credit, so you can pay it off any time without penalty. The hybrid mortgage allows you to have the complete flexibility to mix and match and do whatever you want to do.
We think this is a great option for hedging your bets, you know that in investments you don’t put all your eggs in one basket. This is the way to put all of your eggs in different baskets when it applies to your mortgage and your debt, which in the end becomes a very great strategy for diversifying your mortgage interest rates and making sure that you get some security along with the benefits of lower variable and short-term rates.
We love this strategy, we think this is great for all different types of people. It allows the flexibility to customize and basically create a made to measure mortgage for each individual. We love this strategy, we think you will too. Give us a call to find out more.