If I buy a more expensive house, meaning, the mortgage on the new property would be greater than my current mortgage amount, would my 'new' (ported, Scotiabank) mortgage feature a blended rate? Or perhaps just a blended or new rate on the additional mortgage monies required?
Scotiabank's paperwork doesn't address what happens when you need more money, so if anyone has a clue, I'd appreciate it!
Posted May 5, 2022, 4:45 PM UTC
I did this with Scotiabank, they moved over my original mortgage (at the original rate) and created a new term for the balance.
A blended rate is combining the rate on the current mortgage with the rate on the new funds needed for the upgrade to come up with a "blended" rate for the entire new mortgage. So as a rough example, if you have $500k left @2% on your current mortgage and you add $500k @2.5% for a new house your blended rate would be something like 2.25% for the entire $1mil mortgage.
Per this video from Nolan Matthias, any amount above your current balance is treated a second mortgage (presumably at current rates). https://youtu.be/znM9aXKiYto?t=638
You have to be careful as you can easily end up with overlapping terms, with different maturity dates.
I’m in the process of porting my mortgage to a more expensive house with Scotiabank and the advisor said I would have a new rate for the portion over and above my current mortgage amount. Although I think blending the two is an option in some cases. Give them a call and make an appointment with an advisor.