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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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62% - Often

Variable Interest Mortgage


Synonyms:adjustable interest, floating, non-fixed, shifting
Filed Under: mortgages
Tags: mortgage
 

Definition of variable interest mortgage

variable interest mortgage
1. 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.

Related Terms and Acronyms:

  • guaranteed investment certificate (GIC)   An investment that pays a set rate of interest over a fixed period of time.
  • lock-in   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)   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   A contractual limit on the size of the monthly payment of an adjustable-rate mortgage or other variable rate loan.
  • prime rate   The rate suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.
  • variable interest rate   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)   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.

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