What Is A Trigger Point?
Each lender with have their own variation, however, here is a general summary:
- For a Conventional Variable Rate mortgage (VRM), the Trigger Point is when the principal amount plus interest owing exceeds 80% of the fair market value of the property as determined by TD.
- For an Insured VRM, the Trigger Point is when the principal amount plus interest owing exceeds 105% of the original principal amount of the mortgage loan.
- For mortgage products with HELOC components (term portions), if at any time the outstanding principal amount (including any deferred interest) exceeds the original principal amount, then the Term Portion has reached the Trigger Point.
You will hit your trigger rate first. Once you hit your trigger point, you will see a payment reset. Therefore, we recommend being proactive once you hit your trigger rate.