For a conventional VRM product, meaning a mortgage product with 20% or more in equity, the Trigger Point is when the principal mortgaged amount plus interest owing, exceeds 80% of the fair market value of the property as determined by your lender.
For an Insured VRM product, meaning a mortgage product with less than 20% equity, the Trigger Point is when the principal mortgaged amount plus interest owing, exceeds 105% of the original principal mortgage amount (loan).
On HELOC products, if at any time the outstanding principal amount (including any deferred interest) exceeds the original principal amount, then your mortgage has reached the Trigger Point.
What Happens When You Reach Your Trigger Point? Your lender will notify you by letter and inform you of how much the principal amount exceeds the Trigger Point (the excess amount). Once notified, you will have 30 days to either make a lumpsum payment, increase the amount of the principal and interest payment, or convert to a fixed rate term.