Hybrid mortgages (those that are part fixed and part variable) are something most people don’t think much about.
Maybe more should…especially in this low-rate environment where going 100% variable is not as easy a decision as it used to be.
There are experts out there who also think hybrids are a great idea. Dr. Moshe Milevsky, Canada’s most quoted mortgage researcher, has told us in the past that “People should strongly consider mortgages that are part fixed and part floating.”
The reasons are two-fold: 1) Virtually no one can predict interest rates long-term; and, 2) Hybrid mortgages offer interest rate diversification—which can reduce risk.
Knowing this, Merix Financial has launched a brand new hybrid called the 50/50 “Wise” Mortgage. It lets borrowers lock in 1/2 of their mortgage at a 5-year fixed rate and 1/2 at a 5-year variable rate. The effective combined rate is 3.38% as of today.
The product is suited to a variety of borrowers including:
People who would normally go fully variable but are afraid prime rate is at its bottom.
Those who aren’t comfortable being locked into a fully fixed rate.
Those who can’t decide between a fixed or variable mortgage.
Each portion of Merix’s 50/50 mortgage operates independently, like two separate mortgages. Yet, the product is registered as only one charge.
It comes with:
20% annual lump-sum pre-payment privileges
20% annual payment increase ability
The option to lock in the variable-rate portion at any time
A 120-day rate hold on purchases (60 days on refinances)
Up to a 35-year amortization (the minimum is 20 years)
No switches/transfers are permitted (people at other lenders must refinance if they want it) and there are no pre-approvals.
A minimum credit score of 620-650 applies, as do other conditions. Speak with any Merix-approved mortgage planner for more information.
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