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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Variable Rate


Synonyms:adjustable rate, floating, non-fixed, shifting
Filed Under: financial-banking, mortgages
Tags: banking, mortgage, rates
 

Definition of variable rate

variable rate
1. A floating or non-fixed percentage value or interest rate that fluctuates based on certain economic conditions or rate index. For example, variable rates in reference to mortgage loans rely heavily on the Bank of Canada's prime lending rate. These types of rates can go up or down at any time, therefore are considered variable.

Related Terms and Acronyms:

  • level payment   A method of repayment where periodical payments of principal and interest are made in a certain way so the payment amount remains constant.
  • level-premium insurance   Insurance where the premiums the policyholder pays are guaranteed to remain the same for an agreed upon period of time.
  • mortgage rate   The interest rate on a mortgage loan.
      ➥  You can compare mortgage rates using this website by clicking 'Rates' above.
  • prime lending rate (PLR)   The rate of interest charged on loans by chartered banks to their most creditworthy customers.
      ➥  Bank of Canada's prime (best) lending rate.
  • prime rate   The rate suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.
  • rate index   A table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes for adjustable-rate mortgages and other variable-rate loans.
  • 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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