What Is A Trigger Rate?

Author: Boychuk Mortgage Group |

  • As interest rates on variable products increase and the payments don't change, there will be a point where the principal and interest payments can no longer cover the interest charged on the Mortgage or Term Portion. This happens when your rate has exceeded the Trigger Rate.
  • If the variable rate increases beyond the Trigger Rate, the product will have an increasing balance unless the regular payment (or lump sum payments) are increased enough to cover the outstanding interest.


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