A blanket mortgage is a single mortgage that covers more than one piece of real estate. The different pieces of real estate are held together as collateral, but they may be sold without having to retire the entire mortgage. A blanket mortgage makes it easier to get financing for multiple properties rather than taking out numerous individual mortgages.

Who Is A Blanket Mortgage For?

A blanket mortgage is a financial product that can be used to purchase multiple properties at once. It’s commonly used by developers, real estate investors, and flippers. Blanket mortgages are also referred to as blanket loans. They’re often taken out to cover the costs of purchasing and developing land that borrowers plan to subdivide into individual lots. In many cases, borrowers acquire properties within a large purchase intending to sell them individually later on.


Some flippers turn to blanket mortgages as a way to act quickly and take advantage of any opportunities they see in the market. If the investor identifies multiple properties they want to acquire, refurbish, and put back on the market, a blanket mortgage could offer more leeway to make such actions more possible.

New Buyer

Such a mortgage may enable you to resell the properties as new buyers come forward individually. Depending on the terms of the blanket mortgage, it may or not be necessary to refinance when separate properties are sold.

Blanket Mortgage

Business Owners

If you’re a business owner considering expanding to multiple locations, you may want to explore getting a blanket mortgage. This type of financing can be useful for real estate developers investing in commercial or residential property, like apartment complexes or multifamily homes.


Most blanket mortgages have a release clause that allows the borrower to sell the property and use the funds from that sale to purchase another property. For example, developers who develop land and build homes can sell those homes and use the money generated from sales to buy new plots of land instead of using it to pay down their loans.

Advantages of Blanket Mortgages

A major perk of a blanket mortgage is that the borrower has more cash at their disposal. For example, a property owner can save money on various costs that come with applying for and closing multiple mortgages. The property owner would only need to pay one set of fees for the blanket mortgage instead of separate fees per property.

An aggregate blanket mortgage may have better interest rates or terms than having to pay for multiple loans separately. This could allow the person more money each month if it reduces the size of monthly payments, which in turn could offer them more resources to purchase additional property.

Advantages of Blanket Mortgages


Disadvantages of Blanket Mortgages

Although this type of financing has its benefits, there are also a few drawbacks. For example, the interest rates tend to be higher than with a traditional mortgage. Additionally, because you’re taking out a loan for more money (likely due to the fact that you’re buying multiple properties), the lender may require a larger down payment.

The conditions of the loan are usually distinct from those of conventional mortgages. The lender might mandate that the borrower make a balloon payment, which would necessitate paying off the whole loan within a specific time frame.

If the owner doesn’t make their mortgage payments on one property, it may not just affect that single property. In fact, it could trigger a situation where the lender tries to take control of all properties included in the mortgage.