What Is a Blanket Mortgage?

Partially completed house.
Partially completed house. (Image: Jupiterimages/Stockbyte/Getty Images)

A blanket mortgage is a mortgage that covers multiple properties or pieces of land. The arrangement allows for a property owner or developer to pool property loans into a single loan with a single lender and the same terms, including one interest rate and one regular payment. The blanket mortgage is designed to reduce financing costs and aid efficiency.


A possible use of a blanket mortgage is when a homeowner wants to purchase or build a new home before he has sold his current one. A blanket mortgage allows the homeowner to add the loan for the new home to his current mortgage, combining the payments while the transition between homes occurs. Another common blanket mortgage usage is for property owners or developers with multiple properties. For instance, a homeowner who also owns a vacation home might use a blanket mortgage, as might someone with multiple investment properties. Developers use blanket mortgages when buying and building multiple properties or when developing several plots of land.

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