50/50 Mortgage

June 16, 2009

What is a 50/50 mortgage?

·         50% of the mortgage is at our current standard 5 year fixed rate pricing (currently 4.44%)

·         50% of the mortgage is at our current ARM pricing (currently prime + 0.45%)

·         Effective rate is approximately 3.57% based on current rates!!!! 

·         One collateral charge is registered

·         ARM is convertible at any time during the term of the mortgage to our best fixed rates.  ARM must be locked in to remaining term so both portions mature at the same time

·         Mortgage is portable either into a new 50/50 Balanced Mortgage or the borrower can lock in the ARM portion prior to porting and port the whole mortgage as a blended fixed rate.

The 50/50 Balanced Mortgage Borrowers that choose the 50/50 balanced mortgage will benefit from historically low fixed rates and low ARM rates now and have the opportunity to lock in their ARM rate to a fixed rate at any time during the term of their mortgage.  Your borrowers will be protected by being locked into a low fixed rate now and by having the ability to lock in their ARM portion at our best fixed rates at any point during the term of the mortgage.   The perfect balance.

The Merix 50/50 “Wise” Mortgage

Merix Hybrid mortgages offer interest rate diversification that may be suitable for some home owners. When it is difficult for a borrower to choose a fixed or variable rate mortgage, choosing a hybrid mortgage may be the answer to some borrowers:

Some experts think hybrids are a great idea.  Dr. Moshe Milevsky, a prominent mortgage researcher, in the past said that “People should strongly consider mortgages that are part fixed and part floating.”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 borrowers who are:

  • afraid to take a variable term mortgage, due to fear of rates going up.
  • those not comfortable to lock into a fixed rate mortgage.
  • un-decide whether to get 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.

Merix’s 50/50 mortgage offers:

  • up to 20% lump-sum pre-payment annually
  • 20% increase in monthly payment
  • mortgage portability to another home
  • option to lock in the variable-rate portion at any time
  • a 120-day rate hold on purchases, 60 days on refinances
  • 20 to 35-year amortization

No switches/transfers are permitted (people at other lenders must refinance if they want it) and there are no pre-approvals.

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