A Hybrid Mortgage (50/50) is a cross of fixed-rate and variable rate components
People like the Hybrid mortgage because it can be the best of both worlds, offering the flexibility of a variable rate and some security found in the fixed rates.
For many years, we recommended the variable rate, as it helped our clients save money in the long run. But these days, with the present economy, we are recommending the 50/50 much more often as the fixed rate is at near historic lows.
Let’s be honest, no one knows where this global economy is headed. Even the best in the business are hesitant to be quoted, but with a decent amount of certainty we can say that the 50/50 offers rate diversification, and this may be a play safe in the foreseeable future.
In essence, you have two separate mortgages, while it is registered as one collateral charge.
You main find the 50/50 right for you if:
- Normally choose variable but suspect the prime rate is at the lowest rate now.
- Maybe you don’t like the idea of a fully fixed rate
- You are indecisive and prefer to “hedge” your bets
- You are a first time homebuyer and recognize a good catch when you see it.
According to Dominion Lending Centres, the features of the 50/50 are
- 20% annual lump-sum pre-payment privileges
- 20% annual payment increase ability
- Portability (the option to transfer your existing loan amount to a new property without penalty)
Ready to learn more- call me- let’s talk and see what the best options are for your situation.
Call Bettyanne Neufeld at Leduc 980-2946 – Edmonton 918-7928
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