Blend-and-Extend at Mortgage Renewal
Blend-and-extend lets you blend your existing contract rate with today's market rate for the remaining months, then extend into a new term — without paying a full break penalty. It's offered by most Big 6 banks when you're mid-term or approaching renewal with a large rate gap.
Key Takeaways
- • Best when you're mid-term with a high contract rate and a large IRD penalty to break.
- • The new rate is a weighted average — not automatically the lowest market rate.
- • You stay with the same lender; switching may still win if the rate gap is large enough.
- • Always compare blend-and-extend vs. waiting for renewal vs. broker switch.
How the blended rate is calculated
Banks typically blend: (remaining months × current rate + new term months × market rate) ÷ total months. The exact formula varies by lender. Use our calculator to model scenarios before you call retention.
Blend-and-extend calculator
Model your current rate, market rate, and months remaining to estimate a blended payment.
Run blend-and-extend calculator →When it makes sense
- IRD penalty would exceed $10,000+ if you broke today
- You want to lock today's lower rates without switching lenders
- You're happy with prepayment terms and don't need to shop the full market
See also: early renewal, IRD penalties, and lender pages (RBC, TD).