By using blended payment, mortgage borrowers can repay loans by setting equal monthly payments of principal and interest, over an amortization period agreed upon with their mortgage lenders.
Another way of paying back a mortgage is with a principal + interest arrangement, in which the borrower pays a constant amount of principal each month, along with a steadily decreasing amount of interest payment. In this type of (non-blended) agreement, the total amount paid per month is higher at the beginning of the amortization period, and steadily declines over time as the loan is paid off.
A blended payment loan allows the borrower to benefit from predictable budgeting, as the total mortgage costs are the same from month to month. On the other hand, they will pay more total interest over the course of their amortization period.