Blend and Extend
A renewal option that combines your existing rate with current market rates — extending the term without triggering prepayment penalties.
Blend and extend (sometimes called 'blended rate' or 'early renewal') is an option offered by some lenders where you extend your mortgage term early and receive a new rate that's a weighted blend of your existing rate and the current market rate. This avoids the prepayment penalty you'd otherwise pay to break the mortgage, but the blended rate is typically higher than taking a new term at pure market rates. Blend and extend is most valuable when market rates are below your current rate (the blend brings your rate down) and when you want rate certainty for a longer period without breakage costs.
Related Terms
The process of setting new mortgage terms when your current term ends — you can stay with your lender or switch without re-qualifying (uninsured, unchanged amount).
The fee charged when you pay off or break a mortgage early — the greater of three months' interest or the IRD calculation for fixed-rate mortgages.