Variable Rate Mortgages

A Variable Rate Mortgage is a mortgage that has an interest set against the Bank Prime Interest Rate for the course of the mortgage term chosen by the borrower. Over the course of the term, it is possible and likely that the Prime Interest Rate will move (up/down/both), resulting in changing mortgage payments and interest costs.

While this uncertainty may seem unattractive, most Variable Rate Mortgages are offered at a lower cost than Fixed Rate Mortgages, because of lower costs (because they do not have to gurantee a particular rate) for lenders. In addition, most Variable Rate mortgages arranged by qualified Alberta Mortgage Professionals offer the option of converting the variable rate into a fixed rate mortgage at any time, at no cost. In essence, with a Variable Rate Mortgage, borrowers get to take advantage of savings in the market because they are not forcing the bank to give them the added security of fixed mortgage interest rates or payments. Historically however, interest rates and payments on Variable Rate Mortgages have fallen significantly below those of Fixed Rate Mortgages.

Variable Rate Mortgages are perfect for; individuals who do not operate on fixed montly incomes; people looking to maximize their savings and minimize their interest costs; and in markets where mortgage interest rates are expected to be falling --allowing for borrowers to take advantage of the conversion feature included in most Variable Rate Mortgages.

For more information about incredible new product, contact one of the qualified mortgage professionals at Alberta Mortgage or Apply Online.