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Variable Rate Mortgage

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Features & Benefits


In Variable Rate Mortgage, your payment amount stays fixed for a stipulated term. However, the interest rate can fluctuate at any time with changes in the prime interest rate. Prime interest rates are generally determined by the Bank of Canada. If the prime rate goes down, more of a borrower’s payment will go toward paying off the principal. On the other side, if the prime rate goes up, more of the payment will go toward interest costs.

Convertible Variable Rate Mortgage

A convertible mortgage can be converted to any other term at any point of time. It enables you to convert to a longer closed term, providing security and flexibility. This makes it easy for the borrowers to switch another term if variable rate mortgage no longer meets their needs.

Variable or Fixed Rate Mortgage

The type of mortgage term you need to choose depends on your financial profile and your tolerance for interest rate fluctuation risk.

Fixed rate mortgages provide more security than variable rate because your payments remain constant for the duration of the mortgage term. Whereas, in variable mortgage, the interest rates fluctuate with market conditions, so your mortgage payments can go up or down at any time. However, variable rates are generally better as they provide low rate interest, especially over the long term.

Difference Between An Open Mortgage & A Closed Mortgage

Open mortgages can be paid off at any time without any prepayment charges, while closed mortgages lock you into the loan for a fixed duration of time. With a closed mortgage, borrowers get a lower interest rate than an open mortgage. If you must pay off a closed mortgage, you can pay it, but along with a steep ‘penalty’ for exiting the loan ahead of the schedule.

When does a prepayment charge apply?

  • Mortgage renewal before the maturity date
  • Prepaying more than the amount of your annual prepayment privilege
  • During mortgage refinancing, when a new term is selected
  • Transferring your mortgage to another lender
  • Paying off your mortgage before the maturity date

How is a mortgage term different from an amortization period?

A mortgage term is the duration of your mortgage contract remain in effect. When the term ends, you’ll need to renew your mortgage. On the other hand, the amortization period, is the total duration it will take to pay off the loan amount. Most amortization periods are of 25 years, and if your down payment is less than 20 percent of the property value, this is the longest amortization period offered to the borrowers. The longer the amortization, the lower your monthly payments will be, but the flip-side of the course is that you’ll end up paying more total interest over the life of the loan.

Select Your Payment Schedule

Once you set up your mortgage, you can choose from several payment options available, including monthly, semi-monthly, weekly, bi-weekly. By making payments more frequently, you’ll pay your mortgage quicker and save on interest.


This mortgage product is for you if:

  • You are an experienced homebuyer with financial stability or first-time buyer with a flexible budget;
  • You are comfortable with rate fluctuations;
  • You prefer a low interest rate and small payments;
  • You want to quickly repay your loan;

This mortgage product is not for you if:

  • Your budget is not so flexible;
  • You’re not comfortable with interest rate fluctuations

Get the Lowest Rates

We, at GN, help you get the lowest mortgage rates from Canada’s best banks and brokers. Our agents will recommend you the best mortgage products and interest rates that can meet your financial goal.

Call our mortgage agents today to know more about variable rate mortgage.
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