Variable Interest Mortgage
Definition
- A mortgage product where the interest rate can change or vary during the loan term. The variance in the interest rate usually depends on a specific factor such as prime bank rate or the guaranteed investment certificate rate for a designated lender.
Synonyms
adjustable interest, shifting, floating, non-fixed
Related Terms and Acronyms
- Guaranteed Investment Certificate (GIC) — Acronym, Important,
- An investment that pays a set rate of interest over a fixed period of time.
- Lock-in — Definition,
- A lender's guarantee that the mortgage rate quoted will not change for a specific period. The borrower wants the lock to stay in effect until closing.
- Mortgage (mtg) — Abbreviation, Important,
- A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
- Payment Cap — Definition,
- A contractual limit on the size of the monthly payment of an adjustable-rate mortgage or other variable rate loan.
- Prime Rate — Definition,
- The rate suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.
- Variable Interest Rate — Definition,
- Percentage that a borrower pays for the use of money, and which moves up or down periodically based on changes in other interest rates.
- Variable Rate Mortgage (VRM) — Acronym, Very Important,
- Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
➥ A type of mortgage loan offered by brokers and lenders.
