What is Variable Rate (Variable Rate Mortgage (VRM)) in Canadian mortgages?
Mortgage rate that fluctuates with the Prime Rate. When Bank of Canada raises or lowers rates, the variable rate changes. Payment may be fixed (balance changes) or adjustable (payment changes).
Variable Rate example
Worked example
Prime - 0.90% = 4.30% today. If Bank of Canada cuts 0.25%, new rate = 4.05%, saving ~$65/month on $500,000.