Rates & pricing

Blended rate

When you increase your existing mortgage amount mid-term, the lender averages your current rate with today's posted rate, weighted by the balance and the new money. Used in refinances that avoid a full break.

A blend lets you borrow more (or change your rate) without breaking the mortgage and paying the IRD penalty. The lender weighted-averages your existing rate and today's rate across the old balance and the new money, so your blended rate lands between the two.

There are two flavours: 'blend-and-extend' resets you to a fresh full term, while 'blend-to-term' keeps your existing maturity date. Extending is common when you're also pulling equity; keeping the term suits a smaller top-up.

Blending is often cheaper than breaking, but not always the best deal — sometimes paying the penalty and switching lenders wins. Compare both before signing the lender's blend offer.

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Refinance

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Fixed-rate mortgage

Your interest rate is locked for the entire term — typically 1 to 10 years, with 5-year fixed being the Canadian default. Predictable payments, but breaking early triggers IRD penalties.

Prepayment privilege

The % of your original principal you can pay down each year without penalty, plus any allowed payment increase. Typical: 10/10, 15/15, 20/20. Better privileges = faster mortgage-free.

Rate hold

A lender commitment to honor today's rate for a specified period — typically 90 to 120 days. If rates drop, most lenders re-rate you to the new lower rate. If they rise, you keep your hold.

Variable-rate mortgage

A mortgage where your rate floats with the lender's prime rate (set off the Bank of Canada overnight rate). Payments either change with rate moves (adjustable) or stay fixed with more/less going to principal (variable).

Prime rate

The benchmark each Canadian bank uses to price its variable-rate products. Each bank sets its own, but they all move within 0.05% of each other and only after the Bank of Canada moves its overnight rate.

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