What Is an Adjustable-Rate Mortgage – ARM?
When working with a lender that offers an ARM product, your payment is NOT static on the day of closing, meaning your ARM payment will change with any adjustments to the Bank of Canada’s overnight policy rate. This means your amortization will remain static and you will pay your mortgage off on time.
When the interest rate drops, your amortization drops. When the interest rate pops, your payment pops.