What Is a Variable Rate Mortgage – VRM?

Author: Boychuk Mortgage Group |

  • When working with a lender that offers a VRM product, your payment will remain static on the day of closing, meaning your VRM payment will not change & only the principal & interest on the back end will fluctuate with any BoC change. This means your amortization will otherwise adjust accordingly.
  • When the interest rate drops, your amortization drops. When the interest rate pops, your amortization pops.
  • With some static variable rate mortgage products, there is a trigger rate and trigger point which will inflict an increase to your payment should your mortgage ever reach that point (see below for explanation).
  • It’s also important to note that not every lender that offers a VRM product or has the trigger rate / trigger point policy.

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