What Is a 50-50 Mortgage in Ontario?

A Simple Breakdown for Homebuyers

In Ontario’s real estate market, buyers seek flexible mortgage options like the 50-50 mortgage, a hybrid that splits the loan into fixed and variable portions, though it’s less common than traditional mortgages.

But what is it—and is it right for you?

What Is a 50-50 Mortgage?

A 50-50 mortgage (also known as a hybrid or combination mortgage) splits your home loan into two parts:

• 50% fixed-rate mortgage
• 50% variable-rate mortgage

This means that half of your mortgage has a fixed rate. This offers stability and predictable payments. The other half changes with the market. This can save you money if interest rates go down.

Why Consider a 50-50 Mortgage?

In today’s interest rate climate, it’s difficult to predict what will happen in the next 1 to 5 years. A 50-50 mortgage allows you to hedge your bets:

• Fixed portion gives you protection if rates go up
• Variable portion lets you take advantage of rate decreases
• You might save on interest overall compared to going fully fixed

Pros of a 50-50 Mortgage

1. Balanced risk and reward
2. Some payment stability
3. Potential for lower interest costs than full fixed
4. More flexibility in a changing economy

Cons to Consider

1. Still exposed to rate increases (on the variable half)
2. Slightly more complex mortgage setup
3. Not all lenders offer hybrid products
4. May have different terms/conditions for each portion

Who Is a 50-50 Mortgage Good For?

A 50-50 mortgage may be ideal if you:

• Are uncertain about where interest rates are headed
• Want some security, but still want to stay flexible
• Are comfortable managing two parts of a mortgage
• Are buying in Ontario’s high-priced markets and want to reduce risk

Who Offers Them?

Here are some examples of where you might find hybrid mortgage options:

• TD Canada Trust – Offers a Multiple Term Mortgage, allowing fixed and variable portions
• Scotiabank – Offers a STEP (Scotiabank Total Equity Plan) that allows mortgage splitting
• CIBC – Has flexible options that can include fixed and variable combinations
• Mortgage brokers – Some brokers have access to hybrid products through monoline lenders or credit unions

Things to Know:

• Not all banks promote them publicly—sometimes you have to ask.
• Terms and conditions vary; each portion may have its own rate, payment schedule, and penalties.
• You’ll likely need to work with a mortgage advisor or broker to structure a hybrid that fits your needs.

Final Thoughts

Interest rates are changing, and inflation affects the Bank of Canada’s choices. A 50-50 mortgage gives Ontario homebuyers a good option. It might not be for everyone, but for those who value variety and flexibility, it’s worth considering.

Always talk to a licensed mortgage broker or financial advisor before deciding. The right mortgage strategy can make a significant difference over the life of your loan.