What is your trigger rate, and how does it affect your variable-rate mortgage?

in step with the central bank’s rate. That means variable-rate mortgage holders with a fixed payment will see the interest portion of their payments increase. For those on a fixed-rate mortgage, nothing changes since you would have locked in your interest rate when you signed your mortgage.

With a variable-rate mortgage, the amount you pay is usually fixed. What changes is the amount of your payment going to interest. This interest rate will be affected by the central bank’s. Let’s say you buy a home for $625,000 and have a down payment of 20 per cent . Your mortgage would be $500,000. If this were to happen, your monthly payment wouldn’t even cover the interest owed. In theory, your interest would be deferred. Even though you would be paying your mortgage, your balance would actually increase since the interest you’re not paying is being added to the balance.Article content

For a more accurate number, you could contact your mortgage lender. They’ll be able to calculate your current trigger rate, so you’ll know how much breathing room you have. X 100=Trigger rate in per cent.

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